Taxes for Self-Employed House Cleaner

Taxes for Self-Employed House Cleaner
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Working for yourself cleaning houses can be very rewarding, both personally and financially. But when you are self-employed, you can face a significantly higher tax burden than your traditionally employed peers. Understanding the implications of those taxes is essential, whether you are moving from a full-time job to a business career or just cleaning a few houses on the side.

Federal Income Taxes

The money you earn from your self-employment is taxed as regular income on your federal tax return. The same tax brackets apply for self-employment income and the income you make at an employer.

So, if you earn $30,000 during the 2021 tax year, you’ll pay 12 percent tax on that income. The only difference is you have to pay this money to IRS yourself, as there is no employer to withhold the taxes from your paycheck.

The difference with self-employment taxes is that you claim for expenses that are related to your work. For example, you can claim the cost of cleaning supplies, safety clothing and insurance, as well as a mileage allowance if you drive to your clients' homes or places of businesses.

Social Security Taxes

When you are self employed, either as a house cleaner or in another line of work, the Internal Revenue Service, IRS, considers you to be both the employer and the employee. What that means from a tax perspective is that you must pay both the employer and the employee side of the levy that funds the Social Security program.

As of 2022, that means you must pay ​6.2 percent​ of your income as an employee of your self-employed house cleaning business. In addition, you must pay another ​6.2 percent​ as the employer share.

Dual Medicare Taxes

As a self-employed house cleaner and small business owner, you must also pay both the employer and the employee side of the Medicare tax. As of 2022, both the employer and the employee must pay ​1.45 percent​ of their income in Medicare taxes. That means that the self-employed must pay the full ​2.9 percent​, which represents both the employer and the employer side of the tax.

State and Local Taxes

As a self-employed business owner, you may also be required to pay state and local taxes on the money you make. Look at your last self-employed house cleaner state tax return and see if it contains a section for business income or self-employment income.

If so, you must pay taxes to the state revenue department on the money you make cleaning houses. The same is true of your local taxes if the return includes a section for reporting business income.

Estimating Your Taxes

If you expect to owe ​more than $1,000​ to the IRS, the tax agency may require that you make estimated quarterly tax payments instead of simply paying once a year like you are used to. If you believe you may be held to this requirement, you should check with an accountant or tax planner to be sure.

The tax planner or accountant can also help you determine how much you should pay to the IRS each quarter to avoid additional taxes and penalties.