Coursework · ~20 min
Money & legal foundations for caregivers
The financial and legal basics every paid caregiver should understand — employment status, self-employment tax, rates, and simple contracts — cited from primary sources.
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This module curates the money-and-legal basics from primary sources. It is general information, cited from the IRS and BLS — not tax or legal advice.
What you'll take away
- The difference between a household employee and an independent contractor
- Why self-employment tax exists and roughly how it works
- How to set and raise a rate grounded in real data
- Why even a one-page written agreement protects you
1. Employment status is about control
Per IRS Topic 756, the family's degree of control over how the work is done usually determines whether you're a W-2 household employee or a 1099 contractor — not the label either of you prefers.
2. Self-employment tax, in brief
If you're a contractor, you owe self-employment tax on your net earnings. IRS Publication 926 and related IRS material explain the mechanics; keep clean records of income and expenses.
3. Rates grounded in data
Anchor your rate to local market data — the BLS wage figures are a public starting point — then adjust for experience and specialty.
4. Get it in writing
A short written agreement covering scope, hours, and rate prevents most disputes and supports your tax records.
The knowledge check covers these four ideas. This module and its sources are the material; the check confirms you engaged with them.
Sources
- IRS — Topic No. 756, Employment Taxes for Household EmployeesInternal Revenue Service
- IRS Publication 926 — Household Employer's Tax GuideInternal Revenue Service
- Bureau of Labor Statistics — Home Health and Personal Care AidesU.S. Bureau of Labor Statistics
We organize and cite existing, credible published guidance. We do not author clinical guidance ourselves.