Hiring Domestic Help or In-home Contractors
Many companies are requiring employees to return to an actual office on a part-time or full-time basis. After 18 months of working remote, many individuals have adapted to a routine of supervising in-home help or contractors from the comfort of their home office. Working from home eliminated the need to reschedule meetings or take a vacation day to wait for a contractor.
National Labor Shortage Delays Projects
With the national labor shortage, when a contractor is available to provide a quote and schedule services months in advance, a homeowner will most likely take the appointment. If you are one of those individuals, and now back in the office, you may need a refresher on keeping the personal items in your home secure.
Risks of In-home Workers
Today, the risks associated with leaving your home in the hands of domestic help or temporary in-home contractors is greater than ever before. The following are items to consider when hiring direct employees or independent contractors to work in your home.
Taxes
If the worker is a direct employee and not an independent contractor, the employer (homeowner) or their tax provider, should review IRS publication 926, Household Employer’s Tax Guide to help you decide whether you have a household employee. If you do have a household employee, will there be a need to pay federal employment taxes (social security tax, Medicare tax, FUTA, and federal income tax withholding?
WM WISDOM:
The IRS, as well as other agencies, have an increased concern regarding worker misclassification as it relates to an employee vs. an independent contractor. Penalties could be imposed if incorrectly classified. We strongly recommend you speak with your tax advisor to determine your tax liability for household employees.
Personal Items in Your Home
How many times have you opened a bank statement or retirement portfolio and left it on a table to review at a later time? Do you leave a credit card for emergency use somewhere in your home? And remember, checkbooks are not completely obsolete. Your bank routing number and account number can be photographed with a cell phone and used long after the in-home work was completed.
Saved Log In Information
Many individuals have their home devices set up for an automatic log in. Again, the ease of saving account passwords on home laptops, computers, and tablets makes it easy to perform repetitive tasks.
If you do have automatic log in information saved, anyone can access your accounts such as:
- mutual funds
- investments
- retirement plans
- stock portfolio
- payroll
- tax returns
- social security accounts
- insurance
- bank accounts
Sometimes in-home cameras will deter criminals, but not always. Your accounts can be compromised in seconds and the time it takes to get restitution is much greater.
Keep in mind, thieves are more intelligent and more creative than ever. Transferring money from accounts is often easier than taking tangibles such as jewelry, cash, paintings, collectibles, electronics, or popular medications.
Steps to Avoid Becoming a Victim of Fraud
When seeking in-home help or hiring contractors, it may be helpful to include the following steps:
- Ask friends, colleagues or an online neighborhood group for a personal referral when hiring workers for your home
- If a company, check online reviews
- Make a habit of filing personal documents in a secured, locked cabinet or area
- Shred important documents that you no longer need
- Do not store passwords on your devices
- Lock passwords in a secure location (away from your devices)
- When possible, use Two-Factor Authentication
- Give workers a key to one door, not a master key to all doors, or change your keypad entry number during the duration of the project
- Use a home surveillance system to monitor your home
- Review homeowner’s or renter’s insurance policies for appropriate coverage for liability and property claims
Remember, while we will look forward to the October 15th deadline, the new tax season will begin again in January. Each year the IRS warns of increased fraud regarding tax returns and refunds. As we stated earlier, criminals are intelligent and creative.
WM WISDOM:
Be certain you take the necessary steps to keep your home, financial documents, valuables and account information secure.
Questions?
Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time. We are available to speak with you by phone at 215-675-8364 or you may reach us via email at inquiries@wm-cpa.com.
You may also visit our News page to find the most recent articles published by our CPAs and accounting professionals.
As always, we will continue to stay abreast of news that we believe is relevant for you and your business. Please visit our website for all of our updates, articles and newsletters.
Sincerely,
Wouch Maloney
DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.
