1099 Caregivers: Some Guidance For Independent Contractors About Taxes

1099 caregivers: Private Caregivers and taxes

Are you a caregiver who is an independent contractor?

If you are a caregiver who works with a Nurse Registry you are an independent contractor. Nurse registries work exclusively with 1099 caregivers, who are also considered independent contractors.

What do you mean 1099 caregiver?

In Florida, and many other states, caregivers may choose to work as 1099 independent contractors. This means that they in essence operate their own business. The role of Abby Services, and nurse registries like Abby Services, is to ensure they meet the strict standards outlined by the state of Florida to provide in-home care, and to provide administrative services. This could include marketing their services, collecting their client payments, and serving as a resource for backup caregivers should a 1099 caregiver be unavailable.

We at Abby Services help 1099 caregivers, and clients they serve, by submitting to the IRS, a Form 1099 for each caregiver who earns over $600 dollars in a year. This form reports to the government an in-home caregiver’s earnings for the year. 

We have updated our practices further enabling independent contractor caregivers to manage their taxes by providing access to the Ally platform where caregivers can track and manage their annual earnings making reporting for tax purposes easier.

What does Abby Services know about taxes?

My name is Scott Strachan. I am a nurse and one of the owners of Abby Services. I am not a tax professional and must defer to a CPA for any questions. This information is meant to simply help guide Independent Contractors to available resources. 

We do work hard to stay informed of changing and complicated Federal guidelines that impact Nurse Registries and the 1099 independent contractor caregivers we work with. Through Nurse Registry groups such as The Private Care Association (PCA)

The following information is adapted from The Small Business Administration Website:

Independent Contractors are commonly referred to as consultants, freelancers, or being self-employed.  Independent contractors are individuals who are hired to do a particular job, receiving payment only for the work being done. Independent contractors are business owners and are not their clients’ employees. They do not receive employee benefits or the same legal protections as employees and are often responsible for their own expenses. Many Independent Contractors use a separate Tax ID number for their business as opposed to using their Social Security Number. A Tax ID Number is free to apply for and can be obtained here. The form used is referred to as form ss-4 and a PDF version is available here.

The Hartford also has a great article titled “Everything you need to know about independent contractors.” 

Part of being an Independent Contractor is managing your own taxes.

Independent contractors must pay federal taxes on income and FICA; however, your client will not withhold taxes for you. As a business owner, 1099 caregivers will need to pay estimated taxes throughout the year instead of once a year on April 15.

Not following these laws can get you into big trouble.

The following IRS resources will help you understand how to pay federal taxes as an independent contractor:

 

Self-Employed Individual Tax Center

  • Get all the information you need on federal tax at this one-stop resource for independent contractors.

 

Federal Tax Forms for Sole Proprietors

  • Obtain a list of IRS forms frequently used by independent contractors.

 

One of the common forms referenced and used by Independent Contractors are quarterly income reporting forms or form 941. This form is required for individuals who expect to earn over $1,000 for the year. If it is anticipated that an Independent Contractor will earn less than $1,000 for the year an annual form 944 may be used.

As I said at the beginning, taxes can be confusing and in my opinion, are best left to tax professionals. Hopefully, some of these resources can help.

If you are a private in-home caregiver looking to provide care to seniors in their homes call Abby Services today so we can help refer you to the best clients in our area! Just call 239-590-0861!

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