As a housekeeper, you work hard for your money, so make sure you're not leaving any of it on the table at tax time. Be sure to claim all possible tax deductions to minimize the taxes you may owe or to maximize your tax refund with these five tax tips.
The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change for your 2018 taxes, but won’t impact your 2017 taxes. Learn more about tax reform here.
1. Am I an employee or an independent contractor?
Whether a client hires you as an employee or you work as a self-employed independent contractor dictates what forms you have to file with your annual income tax return. One deciding factor is who controls how the work is done.
An employee-housekeeper generally arrives, cleans and finishes his or her duties at a time and in a manner dictated by the client.
- For example, if the client furnishes the cleaning materials, provides instructions on how to clean and sets your work schedule, you are likely an employee.
- Also, if you earn more than $2,000 in 2017 from a single housekeeping client, you may be an employee for tax purposes.
However, if you're generally on your own in performing your duties and you supply your own tools of the trade—mops, brooms, sponges and cleaning products—the IRS is likely to consider you a self-employed independent contractor.
2. What IRS forms should I look out for?
Housekeepers who are considered employees receive a W-2 form from their employers.
If you're a self-employed independent contractor and you earned $600 or more in 2017 from a client, you might receive a 1099-Misc form.
The main difference for tax purposes is that a Form W-2 shows your employer paid part of your Social Security and Medicare taxes. In addition to paying these taxes on your behalf, an employer may also have to pay you overtime in some states.
Self-employed housekeepers are responsible for paying these taxes on their own.
3. Do I have to report all housekeeping income?
You must report any amounts you earn from housekeeping, whether you're an employee or self-employed, and whether you earned a little or a lot. Also, if you are paid in cash, that is not a reason to underreport earnings or ignore paying taxes on that cash income.
Being paid on the record offers benefits, like accurate recordkeeping, Social Security benefits in the long term, and helps to build a trustworthy, professional relationship between you and your clients.
4. What if I have multiple clients?
Having more than one house to clean is typical in the housekeeping world. Expect to receive multiple W-2s or 1099 forms in the mail shortly after the tax year ends.
Keep in mind that you may not receive all of these forms depending on how much you earned, so carefully keep track of your earnings from each client to avoid underreporting income.
5. What can I write off?
Deducting expenses from your housekeeping income is one perk of working for yourself. But, even if someone else employs you, you may still have expenses related to your work. Deductible business expenses include:
- Cost and maintenance of uniforms, aprons and shoes used on the job
- Insurance, bonding or licensing fees you pay to a trade organization or insurer
- Cleaning supplies and equipment
- Gas or mileage related to work
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