The Schedule
MONEY MEETS TAX · EPISODE 23
Irvine · September 2026
Money & Tax in this episode
Another design project · Two days of childcare · Household employee rules
Daisy was reading the same email for the third time when Evan came into the kitchen.
“Good news?”
“I think so.”
“That sounded careful.”
Daisy turned the laptop toward him.
The email was from someone she had never met.
A referral from the friend whose living room Daisy had worked on earlier that year.
Small house.
Living room and entry.
Maybe a dining area.
No construction.
The client wanted help choosing furniture, lighting, and finishes.
At the bottom was one question.
Would you have time to take this on next month?
Evan read it twice.
“You want to?”
“Yes.”
That part came quickly.
Then Daisy looked toward the living room.
Jiwoo was on the floor beside a basket of toys, pulling each one out as if she had somewhere else to be.
Evan followed her eyes.
“How much time would you need?”
“Not full-time.”
“How not full-time?”
Daisy smiled.
“I knew you were going to ask that.”
“I need units.”
“Of course you do.”
She thought for a second.
“Maybe two real workdays a week.”
“Real meaning?”
“Not answering emails during a nap and pretending that counts as a workday.”
“That does sound less scalable.”
Daisy gave him a look.
Not annoyed.
Just enough.
Evan sat down.
“Okay. Two days.”
“Maybe.”
“And your mom?”
“Can help sometimes. Not two fixed days every week.”
“Daycare?”
“We could look.”
Daisy closed the email.
“But for two days, I’d rather see if someone can come here.”
“A nanny?”
“Part-time.”
Evan nodded.
That sounded simpler.
By dinner, he had already changed his mind.
Not about the childcare.
About the word simple.
Daisy found him at the kitchen island with three browser tabs open.
“What happened?”
“Apparently paying someone to watch your child in your house is less casual than it sounds.”
Daisy pulled out the chair beside him.
“I thought we were just looking for two days of help.”
“So did I.”
Evan looked back at the screen.
“The IRS seems less interested in what we call it.”
One page was about household employees.
Another was about Schedule H.
The third was a payroll service.
Daisy looked at the tabs.
“You got to payroll pretty fast.”
“I searched whether we could just pay someone through Venmo.”
“And?”
“Venmo wasn’t the important part.”
Evan scrolled back up.
“If someone comes here, we set the schedule, tell her what we need for Jiwoo, and basically control how the work is done…”
“She might be our employee.”
“Probably.”
“Even two days a week?”
“Part-time doesn’t make someone a contractor.”
“So if we call her a contractor?”
“That also doesn’t make her one.”
“That seems inconvenient for people who like naming things.”
Evan smiled.
“Very.”
Jiwoo made a sound from the high chair.
Daisy handed her another piece of banana.
“So what does employee mean here?”
“Payroll taxes. Records. Probably a W-2. Schedule H with our return.”
“How much payroll tax?”
“I’m still reading.”
Daisy nodded.
“Okay. Keep reading.”
Evan kept scrolling.
The first candidate they had spoken with had quoted twenty-eight dollars an hour.
Two eight-hour days.
He opened the spreadsheet.
Daisy saw it immediately.
“You’re adding employer tax.”
“I’m adding cost.”
“I know.”
She leaned over his shoulder.
“Just don’t turn twenty-eight dollars an hour into a six-tab model.”
“No promises.”
The number itself was manageable.
That wasn’t really the problem.
The problem was that they had started with a simple question.
Could Daisy get two uninterrupted days each week?
Now there was the hourly rate.
Payroll tax.
Possibly payroll service fees.
Scheduling.
And whether they wanted someone in the house regularly.
Daisy looked again at the client email.
“You know I don’t have to take this.”
Evan stopped typing.
“I know.”
“I mean it.”
“I know.”
She waited.
Evan closed one of the tabs.
“I think you should take it.”
Daisy looked at him.
“Because the spreadsheet works?”
“No.”
“That was suspiciously fast.”
“Because you wanted to before we started talking about childcare.”
She looked back at the email.
That was true.
The tax question had arrived later.
So had the payroll question.
The original answer had been yes.
Daisy opened the email again.
“What if we try it for two days a week?”
“With the caregiver?”
“With all of it.”
Evan nodded.
“And if we hire someone directly, we do the payroll correctly.”
Daisy nodded.
“Good.”
“That was my plan.”
“I know.”
She started typing her response to the client.
Evan went back to the spreadsheet.
He changed the column heading from:
Babysitter
Childcare
Then he added one line underneath.
Payroll / employer cost
Daisy looked over.
“Still two lines?”
“For now.”
“Good.”
She clicked Send.
The two days went on the calendar before the payroll did.
The Tax Behind the Story
Someone who provides childcare in your home may be a household employee if you have the right to control not only what work is done, but how it is done. Part-time work does not automatically make the caregiver an independent contractor, and the payment method does not decide the classification.
For 2026, paying one household employee $3,000 or more in cash wages generally triggers federal Social Security and Medicare tax rules. A separate FUTA test can apply if total cash wages paid to household employees reach $1,000 or more in any calendar quarter of 2025 or 2026. Schedule H and Form W-2 can also become part of the filing process.
California starts earlier. A household employer generally must register with the EDD within 15 days after paying $750 or more in total cash wages in a calendar quarter. At $750 to $999.99, SDI withholding applies; at $1,000 or more, UI and ETT can apply as well.
The tax rules come after the practical decision. For Daisy and Evan, the first question is whether two reliable workdays are worth paying for. If the answer is yes, the payroll rules are part of the cost of creating that time.
Want the tax rules behind the story?
Hiring a Nanny or Babysitter: When Do Household Employment Taxes Apply?
Paying someone to provide childcare in your home can turn a household into an employer. The tax treatment depends on the working relationship, how much you pay, and separate federal and California thresholds.
This guide covers household employee classification, the 2026 federal wage thresholds, Social Security and Medicare taxes, FUTA, Schedule H, W-2 reporting, California EDD rules, and the difference between hiring someone directly and using an agency.