“Families interested in the establishment of a successful long-term relationship with their nanny or other household staff need to start with a clear understanding of the financial obligations of both parties.” ~ Kathy Webb, Homework Solutions
Misunderstandings between you and your nanny on compensation and the financial terms and conditions of employment can torpedo your relationship.
Under common law, a worker who performs services for you is your employee if you have the right to control what will be done and how is will be done. It does not matter if the work is performed on a full-time or part-time basis.
THINGS TO KNOW:
- Tax obligations (nanny and family) – social security, medicare, etc.
- How to take advantage of tax breaks – dependent care, child care tax credit, non-taxable compensation, etc.
- Understand the law around employee benefits
- Understand basic labor laws
- Understand the benefits of paying legally
- How to pay the nanny – gross wage, stated in rate per hour
- Understand the process of “Nanny Tax” compliance
BAD NEWS: You (the family) are responsible to collect taxes (nanny’s portion and employer’s portion) via payroll deductions to pay the IRS. If you fail to collect, YOU remain obligated to pay this tax.
GOOD NEWS: Tax breaks available for dependent care expenses will typically offset the employer taxes for nanny employment!
For details, resources, and answers to your questions, call Homework Solutions.
Call for your free consultation. Please mention CincyNanny!
For more information and pricing, visit their website: click here.
|Household Payroll and Tax Services – HomeWork Solutions Inc.Go ahead – Simplify! Our services are designed exclusively for employers of nannies and other household workers. Trusted by thousands of families nationwide since 1993, we offer a variety of service options, from full payroll to tax support only. 800-NaniTax (800.626.4829)|