What About Taxes?

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Now that you have found the perfect nanny for your family, you might be coming to the realization that you are officially an "employer."   So where do you start?  What are the employment laws in your state?  How will you know how much to deduct from your nanny's salary? How often are you supposed to report her earnings to the IRS? Is there a way to do direct deposits for your nanny? What if you are audited by the IRS? How can you know you did everything correctly?

All of these questions can be daunting, and managing nanny and household help taxes can be time consuming.  Your Happy Nest encourages all of our clients to consider the trusted services of HomePay by Breedlove.  The professionals at HomePay have taken all of the guesswork out of household employer tax requirements.  Not only will they help you navigate your IRS obligations, they offer many services that greatly simplify the process.  Along with expert guidance and support, they offer many services such as payroll management and tax filing.  Download their free e-book and check out the video below to learn more about their services, or simply give them a call for a free consultation. (888-273-3356)  We have a great relationship with this company, so don't forget to tell them that Your Happy Nest sent you!

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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