- What are nanny taxes?
- What are the nanny tax deadlines?
- Why should I pay nanny taxes?
- Am I required to pay nanny taxes?
- How much do nanny taxes cost the employer?
- How do I know how much to pay my nanny?
- How can I save money by paying nanny taxes?
- Can the IRS catch me if I haven’t paid nanny taxes?
- When do I pay my nanny taxes?
- Am I required to withhold federal and state income taxes?
- What are unemployment taxes?
- What are the penalties if I file withholding taxes late?
- Do I have to pay my employee overtime?
- I live in New York, do I have to pay my employee each week?
- I have a nanny on a trial basis. When do I have to start paying taxes?
- Can I hire an illegal alien?
- I’m in a nanny share, how do the taxes work?
- I am a nanny, how do I pay my taxes?
- Is Your Household Worker an Employee?
- Why Isn’t My Household Worker an Independent Contractor?
- Why Can’t I Hire My Nanny as an Independent Contractor?
- What Does the Employer Need to do to Pay Nanny Taxes?
- What Do Nannies Need to Provide to Their Family?
- What Are the Risks of Paying Your Nanny “Under the Table”?
- How Much Work Does It Take to Correctly Administer Nanny Taxes?
- What Forms and Payment are Needed to Comply with Nanny Tax Law?
Why should I pay nanny taxes?
If you’re thinking, “Why should I pay nanny taxes? No one else pays them and I’m not running for public office.” There are three reasons you should pay nanny taxes:
It’s the right thing to do – not only are you protected if audited, but your employee benefits from being paid legally. She will have a record of what she earned which is necessary when making a large purchase like a house or car or when applying for health insurance. When she retires, she may be eligible for Social Security Benefits and Medicare coverage. She may also be eligible for unemployment benefits if she loses her job through no fault of her own. Currently, she can also benefit from reduced health care costs via subsidies provided by the Affordable Care Act. The peace of mind this offers your employee is a real benefit for her and she will be better off by getting all the benefits other professionals enjoy.
Families can also benefit from doing the required tax reporting. Employers may be eligible for money saving tax breaks by paying nanny taxes. There are two strategies to reduce nanny taxes: Flexible Spending Accounts and the Child and Dependent Care tax credit. These tax breaks may offset most of the employer tax cost. See How can I save money by paying nanny taxes for more information.
The IRS will catch you. Paying your employee “under the table” is illegal. If you don’t report your household employee’s wages and don’t pay the associated taxes and you are audited, you will be subject to penalties and interest. You could be subjected to felony tax evasion charges, with possible fines and/or imprisonment! There is less worry about being audited by the IRS or the state if you just comply with the law.
See Can the IRS catch me if I haven’t paid my nanny taxes? for more information.
See What Are the Risks of Paying Your Nanny “Under the Table”? for more information.
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