Why You Want to Receive a Payroll Check
Many people (caregivers and families alike) get very confused over the issue
of getting paid with a personal check, cash or a payroll check. We'd like
to offer you some advise BUT remember that we are not accountants or attorneys
and any advise that we give you is based upon our personal knowledge (which can
be faulty at times!) and is not the same as getting legal or tax advise from a
licensed professional! We cannot be held accountable for the advise that
we give . . . and all that legal stuff ^-^ So, accepting that - here we
go!
I. It's the ONLY legal way to be paid.
A) Is not legal to accept payment for work that you do in the family's home
via personal check or cash -- it must be a payroll check with both parties
paying the appropriate taxes.
B) It is not legal to accept payment for work that you do in the family's
home from a personal business that the family owns.
C) The only legal way for the family to pay you is through a payroll check
that is specifically for you. Either the family gets an employer ID
through the IRS and pays you using that number OR they use a payroll service
(like ours).
D) You are NOT a 1099 employee - the IRS is very clear about the
reasons and
you can read more on their site.
II.
 Your taxes are withheld throughout the year.
Trying to pay all of your taxes on April 15th is difficult and it is
costly. It is not legal to wait until April 15th to make your tax
payment - you must make quarterly estimated payments of your income tax
throughout the year. If you wait until April 15th to calculate and pay
your taxes, you will also be paying a penalty for having waited. See
your tax advisor or accountant for details.
III. You may be entitled to Unemployment Insurance.
If your employer is paying you through a payroll check they will also be
paying for Federal and State Unemployment Insurance. Even part-time
employees can qualify for Unemployment Insurance when laid-off from work.
IV. You will have proof of income.
Thinking of buying a car, renting an apartment or buying a house?
Anytime you apply for credit you will need to show proof of income.
Without pay stubs and W-2's you'll have a hard time establishing your
employment history and getting the credit you deserve.
V. You are accumulating wages for Social Security and Medicare.
Even if retirement is 10, 15 or more years away -- it is to your benefit to
pay into the system and develop the wage base that will be used later to
calculate your benefits. You can learn more on the Social Security web
site about how your reported wages affect your later earnings.
VI. You may be eligible for Social Security and Medicare benefits.
Social Security benefits are not just for retirement. You could
become disabled and no longer be able to work - how would you survive
financially? You would be wise to have paid into the Social Security
system so that you could apply for benefits. There are many scenarios
where you might need to call upon your benefits - but first you have to pay
them!
The INA web site also offers a page that answers a lot of questions
regarding payroll, overtime, benefits, etc. Rather than duplicate
everything that they have - just
click here to see
the page.
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