You may think you have a great arrangement. A friendly college student is giving you a great deal on cleaning work and she does a bang up job. She's always on time, and your kids adore her. She even babysits once in a while. So, what's the problem? The tax man may think this is such a great deal that you should be paying taxes on it.
Paying an independent worker $1,400 or more a year in wages can get you into trouble with the IRS. You may find yourself transformed overnight from a private citizen into an employer responsible for the employer share of social security as well as federal unemployment taxes, applicable state taxes and Medicare taxes, too. Does everyone get caught? No. Will you? Is it worth the risk?