NannyCast 22: Employee (mis) Classification  Am I an independent contractor? My bosses think I should have a 1099, should I? What is a W2? Should I be afraid to fill out a W4? What is an I9? How about a W9? What happens if I get a 1099? And your mnemonic: Even numbers are your friend; Iiiiiiiiiiii’m not worried about it. (download) Additional Show Notes:Recourse for Employees Misclassified as Independent Contractors / Link to SS-8 Homework Solutions on Employee vs Independent ContractorMark Kohler on Employee vs Independent ContractorHawkins Ash CPAs on Employee vs Independent Contractor Transcript: Hello, and welcome to another exciting episode of NannyCast! I’m Nanny Jen. And this episode is unfortunately only useful to nannies based in the United States of America. We are going to talk about being a misclassified employee. [Nanny T] Thank you for that anonymous question Nanny T. The short answer is simply that something is illegal when it is against the law. [Homework Solutions] That audio you just heard came from Homework Solutions, a leader in nanny payroll and taxes and the payroll processor that I personally recommend to all of my employers when they are willing to pay for something automated. The law is absolutely crystal clear that a nanny is an employee. Spelled out. By name. Of course, that requires you to know what a nanny is, and for that, here is Mark J Kohler of C&E CPAs. [Mark quote] So in summary, if you work in the home of your employer, and earn at least $2000 a year, you are a nanny. And not only a nanny, you are a household employee. Are there any childcare workers who work in the home of their employer and earn over $2000 a year who are not nannies? Yes, says Mr. Kohler. [Mark quote] If you work in your own home and have your charges brought to you? Nope, not a nanny. We often debate and deliberate what a nanny is on the nanny support groups and while we like to add all sorts of extras about professional development and social and emotional well being, the truth is that in the United States of America, a nanny is different from a babysitter just by earned income alone: $2000 or more in a calendar year. So that covers what a nanny is and that, by law, a nanny is a household employee. Unambiguously. Because the law says so. Using the word nanny. No question. So then does a nanny, an employee, match with a 1099? Not so. A nanny deserves a W2. And more than that, there are three forms to be aware of. Audio on these topics are aimed at employers rather than employees, but here is Mr. Kohler explaining all of the forms. [Mark quote] The W4 leads to a W2 at year’s end. The W9 leads to a 1099 at year’s end. And the I9? That leads to you having a job. Just remember, if your W form at hiring has a 9 at the end, that’s bad. W9 and 1099 both end in 9 and they are related. W2 and W4 are both divisible by 2. Even numbers are your friend. As for I forms. I don’t care about it. So now that we have thoroughly thrashed the proverbial horse of a nanny being an employee and necessitating a W2 a year’s end, just out of curiosity, let’s find out what this 1099 Independent Contractor stuff is. Here are both Homework Solutions and Mr. Kohler on the topic. Both have slightly different answers because the IRS is a wee bit vague, but the similarities ought to be striking and why a nanny doesn’t qualify is crystal clear. [Homework Solutions] [Mark] So to summarize, a nanny isn’t an independent contractor because they cannot control their schedule, the cannot work for other clients, they are the same person who shows up to work every day or week rather than morphing into someone else, cannot tell their employer that they’ve gone over budget on their income and so the employer has to give them a raise just so, and they cannot single handedly decide to outsource parts of their job without an employer promptly firing them for cause. [S] That’s a good question, because we’ve been implying but not stating that **this is federal**. This m