Taxes for Home Health Aides — 1099, Mileage, and What You Actually Owe
The single biggest financial question in this work is whether you're a W-2 employee or a 1099 contractor, because it changes everything about what you owe and what you can deduct.
If you're 1099, nothing is withheld and self-employment tax applies on top of income tax. That combination is why so many care workers get a bill they never expected.
The offset is that genuine business expenses — mileage above all — reduce that income. Most of what's owed back to care workers is lost simply because nobody kept a log.
Your reality
The parts of this topic that hit your trade differently — and that generic advice skips.
1099 income carries self-employment tax
As an employee, you and your employer split Social Security and Medicare. On self-employment income you generally cover both halves, which is a considerably larger bite than a first-time contractor expects.
Mileage between clients is treated differently by status
For self-employed care workers, driving between clients is generally a deductible business expense. Commuting from home to your first client and back from the last is generally not. For W-2 employees, unreimbursed job costs generally aren't federally deductible at all.
Credits at these incomes are worth more than deductions
A credit reduces tax owed directly. At the incomes common in this work, credits tied to earned income, children, and retirement contributions are typically where the real money is — and they're routinely unclaimed on self-prepared returns.
First moves
Three concrete steps, in order. Each one is a brick laid.
Find out in writing whether you're W-2 or 1099
Ask your agency directly. It decides whether taxes are withheld, whether you owe self-employment tax, and what you can deduct. If you work for more than one agency, the answer can differ for each.
Log mileage from today, in an app
Date, purpose, miles between clients. Reconstructing a year of driving in April is how the largest deduction available to this trade gets abandoned — and it's the one most worth having.
Move a share of every 1099 payment to a tax account
The week it arrives, not at year end. Ask a preparer what percentage suits your situation and whether you should be making quarterly estimated payments.
Frequently asked questions
I got a 1099 and nothing was withheld. What do I owe?
Income tax plus self-employment tax on your net profit — income minus genuine business expenses. Because nothing was withheld, it all comes due at filing unless you've been setting money aside or making estimated payments. A preparer can tell you which applies to you.
Can I deduct the miles I drive between clients?
If you're self-employed, driving between client sites is generally deductible; the first trip from home and the last trip back generally aren't. If you're a W-2 employee, unreimbursed mileage generally isn't federally deductible — ask your agency about reimbursement instead, which is worth more.
My income is low. Is it even worth filing?
Usually yes, and often strongly in your favor. Refundable credits can mean money back even when little or no tax was owed, and you have to file to receive them. Free filing help is widely available at these income levels — worth seeking out rather than paying for preparation.
See where your foundation stands — and what to build next.
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