This year I started taking a senior adult out to run errands and for lunch and such. Initially it was as a family friend but now I have other seniors in the community as well. I am paid by either Venmo or check. I want to include it as self-employment income and pay the taxes myself instead of having the seniors or their families have to be responsible for it.
Since I do it on a regular basis, it seems like the IRS considers me a household employee from what I have read. The seniors decide where we go as far as errands and often lunch though I have input.
Can I just be a self-employed companion or do I have to get the seniors or their families to file the paperwork?
The total will likely be about $10,000 for the year.
I am not a lawyer, but I seem to remember this (which may or may not be true).
I remember hearing that if you give a ride to someone who pays you for the ride, you are similar to a taxi service and those services are regulated. Having one person might be ignored, but having multiple people at one time and/or all seperate might cause questions.
A quick look at Quora also seems to agree by some authors.
Yes, you’d report this basically the same as an Uber driver. Income minus expenses, then add that to your taxable income. You’ll also have to pay self-employment taxes (Social Security plus Medicare). I recommend you make meticulous records of miles driven and deduct the expense (per mile at the IRS business mileage rate) to minimize the amount of SE taxes you pay. It will likely save you several hundred dollars. If you haven’t been keeping a mileage log, start now, and also try to recreate entries thus far. If you have records of payment, you should be able to estimate how far you drove.
And no, your customers won’t have to do anything different for you to do this. Your tax responsibility isn’t their problem.