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Tax Return for Self-Employed Housekeeper

Tax Return for Self-Employed Housekeeper
Ines Zemelman, EA
12 September 2022

Cleaning houses is a difficult job. Whether you do it for a career or as a hobby, no two days are the same. Even your fixed fees might vary depending on the project. When you add in need to file taxes or charge a tax on your services, it may become quite perplexing.

Here's a detailed guide on frequently asked questions regarding how to file taxes as a housekeeper, as well as useful answers to take you through the process of a self-employed housekeeper's tax return.

Are You Self-Employed or a Household Employee?

First, determine if you are an employee or an independent contractor. If you earn more than $2,400 from any single-family in a calendar year and meet specific work requirements, the IRS considers it to be an employer/employee relationship.

The easiest method to tell whether you're an employee of a family is to ask who controls the relationship. If the family selects when you come to the house, what areas you clean, and what materials you use, you're most certainly their employee.

However, if you bring your own mops, bleach, and dust cloths, clean according to your own preferences, operate your own small business and can send a different cleaner to a family's home in your place, you're undoubtedly an independent contractor, not an employee – even if you make more money.

How to File Taxes as an Employed House Cleaner?

If you are classified as an employee, the family for which you work is responsible for deducting Social Security and Medicare (FICA) taxes from your income and for paying a matching share of employer FICA taxes. The family must also provide you with a Form W-2 so that you may submit your own income tax return, rather than a Form 1099, which is exclusively used for independent contractors.

How to File Taxes as an Independent Contractor?

If you are a self-employed housekeeper, you must submit Form 1099 and pay both the employer and employee portion of FICA taxes. From a tax standpoint, this means you must pay both the employer and employee sides of the levy that finances the social security and medicare program.

Self-Employed House Cleaner Taxes

As of 2022, this implies that as an employee of your self-employed house cleaning service, you must pay 7.65% [6.2% (social security) + 1.45% (medicare)] of your earnings and an additional 7.65% (social security and medicare) as the employer share, 15.3% in total.

This IRS handbook for self-employed individuals or small business owners might be a useful resource.

What if I Own a Small Business?

If you own a small business and employ people, you must file Form 944, an employer's annual federal tax return, Form 941, an employer's quarterly federal tax return, and Form 940, an employer's annual federal unemployment (FUTA) tax return. If you employ others, you must obtain an Employer Identification Number (EIN) for tax purposes.

What if I Work for Several Families as Their Employees?

Unless you operate your own business or work via an agency, the $2,400 yearly barrier applies to all situations. If you earn $2,500 from one family, $4,000 from another, and $3,100 from a third, each of those households is compelled by law to withhold taxes from you and pay employer taxes.

This process safeguards both you as an employee and the family that hires you. You will contribute to the benefits you may require in the future, and your employer will be following the law and avoiding any IRS and state tax agency fines. It's also professional, providing you with a job history that can be confirmed when applying for a car loan or a mortgage.

What if I Work but Don’t Make Enough Money to Have Taxes Withheld?

If you have smaller jobs that have employee/employer working relationships, your filing may vary. If your three jobs paid $750, $1,700, and $900, neither you nor your employer has any housekeeper tax reporting or household employment tax liabilities. However, you must claim that money as "other income" on your personal income tax return since the IRS requires you to disclose any earnings earned throughout the year.

Self-Employed House Cleaner Tax Deductions

One advantage of working for yourself is the ability to deduct expenditures from your housekeeping services earnings. 

Deductible business expenses as a self-employed housekeeper include:

  • The cost and upkeep of job-related uniforms, aprons, and gloves.
  • Fees paid to a trade association or insurer for insurance, bonding, or licensing.
  • Cleaning supplies and equipment.
  • Work-related gas or mileage.

The Bottom Line

Operating a small cleaning business may be very rewarding, but it also comes with many of the same obligations as operating any other form of business. Filing housekeeping taxes is only one aspect of being a responsible company owner. Fortunately, you can save money on your taxes by examining your tax-deductible expenses.

You've probably identified some of the most frequent tax deductions for your cleaning service. The key is to keep detailed records of all your business expenses so that you can save a significant amount of money at tax time and avoid stress during tax reporting.

Ines Zemelman, EA
Founder of TFX