cleaning lady

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Topic Author
tunafish
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cleaning lady

Post by tunafish »

I'm thinking of hiring a cleaning lady to do some house work for several hours maybe every two weeks. Stuff I'm too old to do easily and/or just take some of the housework out of my to do queue. There is a currently active thread about hiring a (full time?) nanny that is talking about paperwork, Social Security, etc. Is that required in my cleaning lady situation? I haven't contacted anyone yet, so I have no input on how this is done. I want to do things legally, but this sounds like so much trouble and extra expense if I hired a place to handle this that it would cancel my whole plan to hire someone.
delamer
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Re: cleaning lady

Post by delamer »

You can contract with a cleaning service like “Merry Maids” (not an endorsement).

Then you don’t need to deal with any of the paperwork.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
tenkuky
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Re: cleaning lady

Post by tenkuky »

Depends on whether you consider them an independent contractor or your employee. That brings into play whether you withhold taxes and if you issue a 1099.
I second delamer, just work with a service who handles all that. They are likely more expensive though, and not amenable to your schedule (they like to clean on their frequency).
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AnnetteLouisan
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Re: cleaning lady

Post by AnnetteLouisan »

No, in all likelihood the cost is under the threshold.I use a service but not often enough to matter except to me. I recently used Homey (homeylikeus.com), which lets you schedule and tailor exactly what they do online and control the cost so there are no surprises. They did a very thorough job and were pleasant to deal with. They handle the employment details and one pays by credit card.
Last edited by AnnetteLouisan on Wed Jul 06, 2022 10:30 am, edited 2 times in total.
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TomatoTomahto
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Re: cleaning lady

Post by TomatoTomahto »

We have cleaners. They are truly independent contractors. A nanny has one client who directs his/her activities. A cleaner has multiple clients, might bring helpers, etc.

ETA: our nanny received a W2. Our cleaners receive nothing other than a Venmo payment.
Last edited by TomatoTomahto on Wed Jul 06, 2022 10:29 am, edited 2 times in total.
I get the FI part but not the RE part of FIRE.
SnowBog
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Re: cleaning lady

Post by SnowBog »

To add... I think the "paperwork" comes up if there is the ability for the person to be considered "your employee". I believe there is a federal view of that, and maybe even state rules...

But to delamer's point, if you have a "contract" through an organization - that should avoid any/all confusion. You are paying the business for a service. It's their responsibility to deal with any reporting/taxation/etc. requirements with the people doing the work.

Which differs from paying someone individually. It's those scenarios you really need to understand what you are getting into (which also includes things like insurance, etc.).
adamthesmythe
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Re: cleaning lady

Post by adamthesmythe »

delamer wrote: Wed Jul 06, 2022 10:20 am You can contract with a cleaning service like “Merry Maids” (not an endorsement).

Then you don’t need to deal with any of the paperwork.
I have done this. The cost is a good bit higher than under-the-table. I used the service in part because...it's just wrong to pay under the table...and in part because black economy workers are eventually exploited because they do not accumulate SS credits.
delamer
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Re: cleaning lady

Post by delamer »

adamthesmythe wrote: Wed Jul 06, 2022 10:26 am
delamer wrote: Wed Jul 06, 2022 10:20 am You can contract with a cleaning service like “Merry Maids” (not an endorsement).

Then you don’t need to deal with any of the paperwork.
I have done this. The cost is a good bit higher than under-the-table. I used the service in part because...it's just wrong to pay under the table...and in part because black economy workers are eventually exploited because they do not accumulate SS credits.
Yep. It protects you and it protects the cleaners.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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TomatoTomahto
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Re: cleaning lady

Post by TomatoTomahto »

TomatoTomahto wrote: Wed Jul 06, 2022 10:26 am We have cleaners. They are truly independent contractors. A nanny has one client who directs his/her activities. A cleaner has multiple clients, might bring helpers, etc.

ETA: our nanny received a W2. Our cleaners receive nothing other than a Venmo payment.
Edited “her” to be “his/her.” We had a male nanny for a short time that we referred to as a “manny.”
I get the FI part but not the RE part of FIRE.
bh1
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Re: cleaning lady

Post by bh1 »

The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
tenkuky
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Re: cleaning lady

Post by tenkuky »

TomatoTomahto wrote: Wed Jul 06, 2022 10:32 am
TomatoTomahto wrote: Wed Jul 06, 2022 10:26 am We have cleaners. They are truly independent contractors. A nanny has one client who directs his/her activities. A cleaner has multiple clients, might bring helpers, etc.

ETA: our nanny received a W2. Our cleaners receive nothing other than a Venmo payment.
Edited “her” to be “his/her.” We had a male nanny for a short time that we referred to as a “manny.”
I remember Handy Manny. My little one's favorite show. But I digress :oops:
TT raises a good point: if a cleaning person has additional help and splits the amount with, what are the implications for the payor?
neilpilot
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Re: cleaning lady

Post by neilpilot »

pshonore wrote: Wed Jul 06, 2022 10:45 am
neilpilot wrote: Wed Jul 06, 2022 10:28 am I consider "cleaning lady" an archaic term. I have a "cleaning person" that comes every 2 weeks. The threshold for issuing a 1099 last year was $600.
Are you considering issuing a 1099?
I issue a 1099-Misc by end of January of the following year
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8foot7
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Re: cleaning lady

Post by 8foot7 »

We pay our house cleaner $140 every two weeks. I write a check to her personally. I do not file 1099s for her, nor do I want her social security or taxpayer ID number. I am not advising you to do the same, only communicating my practice.
delamer
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Re: cleaning lady

Post by delamer »

bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No benefits at all?

My service was insured and bonded. When the cleaner scratched my stainless cooktop, the service paid several hundred dollars to replace it. Do you think I would have received that money from an individual cleaner?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
bh1
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Re: cleaning lady

Post by bh1 »

delamer wrote: Wed Jul 06, 2022 10:55 am No benefits at all?

My service was insured and bonded. When the cleaner scratched my stainless cooktop, the service paid several hundred dollars to replace it. Do you think I would have received that money from an individual cleaner?
To clarify, no benefits to the cleaner, which is what is important to me. No health insurance, no retirement program, &c. If I am wealthy enough to hire a cleaner, then I am wealthy enough to self-insure my countertops.
Flyer24
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Re: cleaning lady

Post by Flyer24 »

An off-topic comment about gender was removed. Stay focused on the financial aspects.
Katietsu
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Re: cleaning lady

Post by Katietsu »

neilpilot wrote: Wed Jul 06, 2022 10:52 am
pshonore wrote: Wed Jul 06, 2022 10:45 am
neilpilot wrote: Wed Jul 06, 2022 10:28 am I consider "cleaning lady" an archaic term. I have a "cleaning person" that comes every 2 weeks. The threshold for issuing a 1099 last year was $600.
Are you considering issuing a 1099?
I issue a 1099-Misc by end of January of the following year
Why? My understanding is that there is no need to do this if a person is cleaning your personal residence every couple weeks, regardless of the total amount paid. See my response below for IRS quote.
Last edited by Katietsu on Wed Jul 06, 2022 11:27 am, edited 2 times in total.
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samsoes
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Re: cleaning lady

Post by samsoes »

8foot7 wrote: Wed Jul 06, 2022 10:54 am We pay our house cleaner $140 every two weeks. I write a check to her personally. I do not file 1099s for her, nor do I want her social security or taxpayer ID number. I am not advising you to do the same, only communicating my practice.
Just like paying a guy to cut your grass every two weeks. Just pay him and it's up to him to declare whatever income he receives when he files his taxes.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Katietsu
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Re: cleaning lady

Post by Katietsu »

bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No flexible morals required. There is not a paperwork requirement from the IRS perspective if you hire someone to clean your house a couple times a month under the normal type of arrangements under which this is typically done. They are self employed. Any requirements are on them. This is not the same as hiring a person to clean your AirBnB or hiring a full time nanny.

From IRS:
You are not required to file information return(s) if any of the following situations apply:

—You are not engaged in a trade or business.

—You are engaged in a trade or business and
-the payment was made to another business that is incorporated, but was not for medical or legal services or
-the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
FYI, a 1099 is an information return.
GenawithanE
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Re: cleaning lady

Post by GenawithanE »

if you hire a service like Merry Maids, you will get their standard set of cleaning activities, someone you don’t know will have your key, and you may get different folks each time. in this situation they are not your employee so no paperwork needed. i assume that Merry maids or similar companies check that their employees are legal to work.
In the DMV area, if you hire a smaller company, usually an experienced woman who hires some helpers, you have more ability to customize what is done and more continuity. if they bring their own cleaning tools and set their schedule, and can bring whichever helpers they choose, they are not likely your employees, so no paperwork needed. if you care that the senior person and their employees are legal to work, you need to bring it up but it is not a requirement for you to do that.
if you hire a specific person to come to your house a couple hours each week to do the varying specific tasks you set, you are likely now an employer, with all that entails: filling out the I9 form, dealing with social security if your total payments exceed the threshold, and federal
and state unemployment taxes if your payments exceed those thresholds.
Barsoom
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Re: cleaning lady

Post by Barsoom »

This may be a loose definition, but if they bring their own cleaning tools and supplies (their own vacuum cleaner, mop and bucket, brushes, and cleaning solutions), then they meet the definition of an independent contractor.

If they use your vacuum cleaner, your mop and bucket, your brushes and cleaning solutions, then they meet the definition of an employee.

-B
tenkuky
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Re: cleaning lady

Post by tenkuky »

Barsoom wrote: Wed Jul 06, 2022 12:17 pm This may be a loose definition, but if they bring their own cleaning tools and supplies (their own vacuum cleaner, mop and bucket, brushes, and cleaning solutions), then they meet the definition of an independent contractor.

If they use your vacuum cleaner, your mop and bucket, your brushes and cleaning solutions, then they meet the definition of an employee.

-B
And what about mix-and-match?
Our cleaning person uses our vacuum and Swiffer, but brings their own solutions, mop, bucket.
shell921
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Re: cleaning lady

Post by shell921 »

How much can you pay someone without paying taxes?

$15,000
The annual exclusion for 2014, 2015, 2016 and 2017 is $14,000. For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000.

In one year's time I pay my cleaning lady about $2,500.
delamer
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Re: cleaning lady

Post by delamer »

bh1 wrote: Wed Jul 06, 2022 10:58 am
delamer wrote: Wed Jul 06, 2022 10:55 am No benefits at all?

My service was insured and bonded. When the cleaner scratched my stainless cooktop, the service paid several hundred dollars to replace it. Do you think I would have received that money from an individual cleaner?
To clarify, no benefits to the cleaner, which is what is important to me. No health insurance, no retirement program, &c. If I am wealthy enough to hire a cleaner, then I am wealthy enough to self-insure my countertops.
The service that I used provided health insurance to its cieaners.

Probably unusual though.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
RetiredArtist
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Re: cleaning lady

Post by RetiredArtist »

Katietsu wrote: Wed Jul 06, 2022 11:24 am
bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No flexible morals required. There is not a paperwork requirement from the IRS perspective if you hire someone to clean your house a couple times a month under the normal type of arrangements under which this is typically done. They are self employed. Any requirements are on them. This is not the same as hiring a person to clean your AirBnB or hiring a full time nanny.

From IRS:
You are not required to file information return(s) if any of the following situations apply:

—You are not engaged in a trade or business.

—You are engaged in a trade or business and
-the payment was made to another business that is incorporated, but was not for medical or legal services or
-the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
FYI, a 1099 is an information return.
Thanks for noting that the IRS limit is $600- you would soon exceed that if your house cleaner came once a month.
Pablov
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Re: cleaning lady

Post by Pablov »

shell921 wrote: Wed Jul 06, 2022 1:06 pm How much can you pay someone without paying taxes?

$15,000
The annual exclusion for 2014, 2015, 2016 and 2017 is $14,000. For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000.

In one year's time I pay my cleaning lady about $2,500.
I believe you are referring to the exemptions on gift taxes when you give somebody a gift, defined by the IRS as:"Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return."

https://www.irs.gov/businesses/small-bu ... gift-taxes

In this case they are paying somebody for a service. The cleaning lady si actually household employee and that is where things can get complicated depending on how much you pay them. In a nutshell, if you pay them 1,000 or more in a quarter or 2,400 or more in a year, then you have to pay FUTA (Fed unemployment tax), possibly state unemployment tax and possibly social security and medicaid.

I suggest you look into this. Most is kind of explained towards the beginning.

https://www.irs.gov/publications/p926


So basically, once you pay over those thresholds things get very complicated unfortunately. Your options are:

1. Pay them cash "under the table" which is wrong, plus it can possibly make you liable for their taxes and for penalties if you get caught.
2. Pay them whoever you want but make sure you pay the associated taxes if you go over the tresholds.
3. Hire them through a service where they take care of all that stuff.
4. Look for a company that handles this for you. you hire the person and they take care of the paperwork. look online for something like nanny taxes or nanny payments.

It is a real bummer that the tax code is so complicated for something like this. IMO, It really nudges people towards just doing things illegally.

cheers
heywhoathere
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Re: cleaning lady

Post by heywhoathere »

The cleaning service I use hires cleaners as full-time employees and takes care of taxes/paperwork on their end.

It's significantly more expensive than just having a "person" who cleans your house, but it's also much more convenient. Their online portal handles all of the scheduling and supports auto-payments, so after getting everything setup for the first few cleanings I now get to do nothing and enjoy my clean house.
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Rob5TCP
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Re: cleaning lady

Post by Rob5TCP »

Generally over $600 (for a business) I send them a year end 1099.
That is for individuals. For businesses, I need their business license #
there is a form for that.
I am not sure that you need to pay w/h taxes as opposed to just
sending them a 1099???
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ResearchMed
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Re: cleaning lady

Post by ResearchMed »

Rob5TCP wrote: Wed Jul 06, 2022 4:30 pm Generally over $600 (for a business) I send them a year end 1099.
That is for individuals. For businesses, I need their business license #
there is a form for that.
I am not sure that you need to pay w/h taxes as opposed to just
sending them a 1099???

If they are independent contractors who appropriately are being given 1099s, then no withholding.
If they are *employees* (it's a legal distinction) being paid and W-2 forms will be generated, then withholding is done.

That's how I understand it, anyway.
There seems to be some difficulty in some cases in determining whether the work is being done by an independent contractor or an employee. The IRS has specific definitions/descriptions of each of these. It's not just a choice that an employer or employee makes; it's based upon the nature of the work.

RM
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Marseille07
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Re: cleaning lady

Post by Marseille07 »

I just schedule an appointment with a company running cleaning business and pay with my CC. I do not believe I have any obligations to report 1099 or anything of that sort.
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Rob5TCP
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Re: cleaning lady

Post by Rob5TCP »

ResearchMed wrote: Wed Jul 06, 2022 4:35 pm
Rob5TCP wrote: Wed Jul 06, 2022 4:30 pm Generally over $600 (for a business) I send them a year end 1099.
That is for individuals. For businesses, I need their business license #
there is a form for that.
I am not sure that you need to pay w/h taxes as opposed to just
sending them a 1099???

If they are independent contractors who appropriately are being given 1099s, then no withholding.
If they are *employees* (it's a legal distinction) being paid and W-2 forms will be generated, then withholding is done.

That's how I understand it, anyway.
There seems to be some difficulty in some cases in determining whether the work is being done by an independent contractor or an employee. The IRS has specific definitions/descriptions of each of these. It's not just a choice that an employer or employee makes; it's based upon the nature of the work.

RM
With an independent contractor, do you tell them the days they will work and what hours. Are you their only employer
or do they have several. The cleaner of my apt has 2 appts a day 5-6 days a week. So, no chance of her being an
employee of mine.
Topic Author
tunafish
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Re: cleaning lady

Post by tunafish »

Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.
Katietsu
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Re: cleaning lady

Post by Katietsu »

tunafish wrote: Wed Jul 06, 2022 5:16 pm Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.

Why not? I think it sounds like a great idea. And I am not sure why there are so many posts suggesting that you need to do any more than just pay them. I am quite confident that there is no federal rules or paperwork needed in the typical bi weekly house cleaner situation. In my location, I would have no local or state issues either.

My suggestion is to ask friends and family for a recommendation. Then wait until one of these recommended individuals has an opening.
Katietsu
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Re: cleaning lady

Post by Katietsu »

RetiredArtist wrote: Wed Jul 06, 2022 3:03 pm
Katietsu wrote: Wed Jul 06, 2022 11:24 am
bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No flexible morals required. There is not a paperwork requirement from the IRS perspective if you hire someone to clean your house a couple times a month under the normal type of arrangements under which this is typically done. They are self employed. Any requirements are on them. This is not the same as hiring a person to clean your AirBnB or hiring a full time nanny.

From IRS:
You are not required to file information return(s) if any of the following situations apply:

You are not engaged in a trade or business.

—You are engaged in a trade or business and
-the payment was made to another business that is incorporated, but was not for medical or legal services or
-the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
FYI, a 1099 is an information return.
Thanks for noting that the IRS limit is $600- you would soon exceed that if your house cleaner came once a month.
Please note the bold exception. In other words, the $600 amount is not relevant if they are cleaning or private home unrelated to any business or trade on your part.
Katietsu
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Re: cleaning lady

Post by Katietsu »

Per IRS Pub 926:
Workers who aren't your employees. If only the worker can control how the work is done, the worker isn't your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business.
In my experience, the house cleaner has a dozen or more clients and gets to decide how the work is done for the most part. They might call you to tell you that Wednesday is not going to work this week for them as opposed to an employee who would call and ask you for Wednesday off. Many in my area bring their own supplies as they have their preferred products and equipment. But I do not think the intent of the IRS code is to change the relationship just because your pandemic concerns leads you to ask the cleaner to use your vacuum.
RoadThunder
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Re: cleaning lady

Post by RoadThunder »

tunafish wrote: Wed Jul 06, 2022 5:16 pm Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.
That’s too bad, we’ve had twice monthly cleaners for 25 years - cash in envelope left on the dinning room table.
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TomatoTomahto
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Re: cleaning lady

Post by TomatoTomahto »

tunafish wrote: Wed Jul 06, 2022 5:16 pm Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.
Hire a good cleaner and be happy to be able to have a clean house and support someone who probably needs the money more than you do.

We have our cleaners come on Friday. They don’t always do the whole house, so I usually text them on Wednesday if we’ve had guests and they need to clean the guest rooms — it helps them plan timing and how many helpers to bring.

They are so honest and hard working that during early COVID days I paid them and told them not to come to our house. I did not want to lose them as a resource.

I do not give them a 1099.
I get the FI part but not the RE part of FIRE.
student
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Re: cleaning lady

Post by student »

Katietsu wrote: Wed Jul 06, 2022 6:08 pm
RetiredArtist wrote: Wed Jul 06, 2022 3:03 pm
Katietsu wrote: Wed Jul 06, 2022 11:24 am
bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No flexible morals required. There is not a paperwork requirement from the IRS perspective if you hire someone to clean your house a couple times a month under the normal type of arrangements under which this is typically done. They are self employed. Any requirements are on them. This is not the same as hiring a person to clean your AirBnB or hiring a full time nanny.

From IRS:
You are not required to file information return(s) if any of the following situations apply:

You are not engaged in a trade or business.

—You are engaged in a trade or business and
-the payment was made to another business that is incorporated, but was not for medical or legal services or
-the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
FYI, a 1099 is an information return.
Thanks for noting that the IRS limit is $600- you would soon exceed that if your house cleaner came once a month.
Please note the bold exception. In other words, the $600 amount is not relevant if they are cleaning or private home unrelated to any business or trade on your part.
Thank you. This is good enough to know.
NHRATA01
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Re: cleaning lady

Post by NHRATA01 »

tunafish wrote: Wed Jul 06, 2022 5:16 pm Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.
We tried Merry Maids when we finally wanted to outsource home cleaning. They come the first time with 2 people, spend a few hours there and make the place look great. After 3-4 visits you get one person, they rush through in 1-2 hours and we were less than enthused with quality. While they like to use the term "English speaking" as some sort of rather ethnocentric selling point, the reality is you are still often getting a different person each time, some of questionable background. I had a cousin who worked for them after being in a difficult situation and not able to get regular employment, and they weren't exactly great at treating their employees.

So for the past 5-6 years we have had a South American cleaning lady who we pay cash for a visit every 2 weeks (plus a Christmas bonus) and she does a wonderful job. Make of it what you will...
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celia
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Re: cleaning lady

Post by celia »

shell921 wrote: Wed Jul 06, 2022 1:06 pm How much can you pay someone without paying taxes?

$15,000
The annual exclusion for 2014, 2015, 2016 and 2017 is $14,000. For 2018, 2019, 2020 and 2021, the annual exclusion is $15,000.

In one year's time I pay my cleaning lady about $2,500.
Would you “gift” her if she didn’t show up regularly? If not, obviously it’s not a gift.

But it is over $600! :oops:
bberris
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Re: cleaning lady

Post by bberris »

Someone who comes to clean once a week is not an employee, unless you want them to be. You don't set their hours.
coachd50
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Re: cleaning lady

Post by coachd50 »

tunafish wrote: Wed Jul 06, 2022 5:16 pm Okay, I'm not hiring anybody.

As to Merry Maids, my sister-in-law hired them and said they did a lousy job. Probably that varies by area.
If your statement here is based on concerns for having to do anything other than give the cleaner cash or a check, please read katietsu’s reply highlighting the fact that you are not engaged in a trade or business for this transaction.
Chardo
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Re: cleaning lady

Post by Chardo »

Has anyone ever had any IRS issue with paying for routine house cleaning services?
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TomatoTomahto
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Re: cleaning lady

Post by TomatoTomahto »

Chardo wrote: Fri Jul 08, 2022 6:09 am Has anyone ever had any IRS issue with paying for routine house cleaning services?
IME No. Not even people running for public office :D
I get the FI part but not the RE part of FIRE.
YeahBuddy
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Re: cleaning lady

Post by YeahBuddy »

If you hire a large cleaning "maid" company, you simply pay the bill they send you.
Light weight baby!
JackoC
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Re: cleaning lady

Post by JackoC »

Katietsu wrote: Wed Jul 06, 2022 6:08 pm
RetiredArtist wrote: Wed Jul 06, 2022 3:03 pm
Katietsu wrote: Wed Jul 06, 2022 11:24 am
bh1 wrote: Wed Jul 06, 2022 10:43 am The services are great. The one I used took half of what I paid the cleaner and provided no benefits at all. Oh, wait, was I sarcastic there?

I was not allowed to hire her directly for six months after cleaning through the service, so I did just that - waited six months and hired her directly. I don't think the "paperwork" is much more than paying the cleaner's SS contribution. What, a 1099? TurboTax will do the form for you. You can blow that off if it is less than some nominal amount per year (was $300 or $600 per year, years ago), or if you have flexible morals. No one will come after you unless you run for public office.
No flexible morals required. There is not a paperwork requirement from the IRS perspective if you hire someone to clean your house a couple times a month under the normal type of arrangements under which this is typically done. They are self employed. Any requirements are on them. This is not the same as hiring a person to clean your AirBnB or hiring a full time nanny.

From IRS:
You are not required to file information return(s) if any of the following situations apply:

You are not engaged in a trade or business.

—You are engaged in a trade or business and
-the payment was made to another business that is incorporated, but was not for medical or legal services or
-the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
FYI, a 1099 is an information return.
Thanks for noting that the IRS limit is $600- you would soon exceed that if your house cleaner came once a month.
Please note the bold exception. In other words, the $600 amount is not relevant if they are cleaning or private home unrelated to any business or trade on your part.
I agree on this and your subsequent post about employee v contractor. A homeowner/renter hiring a service like cleaning needn't generally worry about either the people being considered their employees, or about filing 1099's for them as contractors. Some people seem to feel they have an ethical obligation to make it harder for other people to evade taxes, as by for example refusing to pay in cash or otherwise putting a transaction 'on the books' so, it's believed, the recipient is more constrained to report it on their taxes. But that's not a legal requirement. There is no tax issue IMO with hiring a self employed house cleaner for your house, paying whatever amount by whatever means of payment you agree, and doing nothing further. If you're a landlord (in the 'trade or business' of renting out properties), different.

And I believe it's well established nannies (the recent thread) are employees and self employed house cleaners aren't. This issue didn't just arise the last few days on that thread. 'Employee' is somebody who works hours you require and takes specific instruction how to accomplish the tasks you set out (on your shift from X>Y o'clock, feed the kid this, take them to the park at this time, etc). A contractor agrees to accomplish a task mainly by their own means and methods working as long as it takes to accomplish it. And I agree it doesn't rest on the knife edge of whether they bring a particular tool or use yours though former is preferred. The reasons to go with a cleaning service are things like vetting, having access to different people for ease of scheduling or a team to do it quicker, insurance, and some people don't like negotiating prices one on one. Not a tax issue.
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beyou
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Re: cleaning lady

Post by beyou »

Make sure they bring their own cleaning supplies.
This is one of the differences between an employee and a vendor. If they use your vaccuum and cleaning supplies, and you pay them over $2400/year, could be considered employees.
Marseille07
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Re: cleaning lady

Post by Marseille07 »

RobLyons wrote: Fri Jul 08, 2022 6:47 am If you hire a large cleaning "maid" company, you simply pay the bill they send you.
This is my understanding as well. But if you hire a cleaning service every 2 weeks, then maybe the bill runs up quite high? I call them like once a quarter.
diverdoc
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Re: cleaning lady

Post by diverdoc »

I did something similar when I moved to a new apartment. Before I left my old place, I got a cleaning company to do an extensive cleaning called end-of-tenancy cleaning. They were excellent and did a great job, so I hired them for my new place.

They're affordable and quick, finishing all the cleaning in about an hour. Having them come every two weeks is a smart move. It's greatly helped me by saving time and making my life easier.
Last edited by diverdoc on Tue Dec 19, 2023 3:50 am, edited 1 time in total.
Alfonsia
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Re: cleaning lady

Post by Alfonsia »

If you are on your local Nextdoor, there will be plenty of recommendations.
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