Conquering the Nanny Tax

Untitled designJust in time for summer, senior accountant Diana Spatoulas answers important questions about handling the tax implications of household employees.  via Accounting Today

Now that the school year has ended, it is time to consider child care during the summer months.Instead of sending children to day care or summer day camp, many parents consider hiring a nanny or frequent baby sitter to watch their children. As if balancing work and childrearing is not challenging enough, if parents get outside help to care for their children at home, they will also need to understand the tax implications. Unless they are tax experts, they probably have a few questions about how to do things correctly.

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If parents have a nanny or frequent babysitter watching their children at home, that person is considered a household employee if she is in charge of what work is done and how it is done (which is usually the case). It does not matter whether the person works full time or part time, or that the person was hired through an agency or from a list provided by an agency or association. It also does not matter whether the person is paid for the job or on an hourly, daily or weekly basis. READ MORE