![]() ![]() ![]() Now that I've gone through it once, it doesn't seem too bad.ĬAN I GIVE MY NANNY A 1099 OR CALL THEM AN INDEPENDENT CONTRACTOR? If you know how to check basic calculations with Excel, you'll have no problem. In the end, I'll save money doing this on my own given that I'll probably have some sort of household employee for the next several years. You can pay taxes yourself (read below) or sign up for a payroll service (for $$$/year). Read this NY Times article about the subject of avoiding taxes and the headaches involved. You can also claim your dependent care tax credit. The benefits are that your nanny can later get unemployment benefits and you'll be adding to their social security. If you pay your household employee over $2400 per year (in 2022), then you'll need to pay some sort of federal employment taxes. (I am unable to respond to your specific tax questions and am not a tax expert.) If you find any external links or information that you believe are inaccurate or have additional items you think would improve this document, please contact me. Take the time to read over the IRS documents (search for publication 926 - Household Employer’s Tax Guide) and ask a payroll specialist or tax advisor if you need to verify any information. While I spent a lot of time researching this for my own uses, I provide no warranty, expressed or implied, as to accuracy, reliability, timeliness, or completeness of the information furnished. This document is intended for Washington State residents who are paying nannies (or other household employees) but people from other states can also follow this and just research "household employer" business licensing for their own state. I thought it would be helpful to write out my process so that other parents could follow the same instructions and save time. I make a living documenting and designing technical information for scientists and engineers. ![]() It is really a chore to figure it out on your own. When I tried to figure out how to pay taxes for my two part-time nannies, I found that there is a wealth of information online, but it was difficult to piece it all together. I no longer have a household employee so feel free to send me any updates you have to this information and I will do my best to keep it current. This site was first created in August 2011. CTRN employs our temporary team, and as such, pay all of the appropriate taxes.Updated Januto clean up old URLs and added the 2022 threshold. In addition, there are severe penalties imposed by the IRS if it is discovered you didn’t pay taxes on your employee. What message does that send to your nanny? Choose The Right Nanny encourages all families to pay fair and legally. When you and your nanny agree to pay ‘off the books’ you are mutually agreeing to break the law. Paying your nanny legally is the right thing to do. This practice, while common, is illegal and there are significant risks associated with it. You may have heard from friends that they do not pay nanny taxes, instead choosing to pay them “off the books” or “under-the-table”. The short answer is Yes, you must pay payroll taxes. If you hire a household employee and pay them directly, they are your employee. According to the IRS “Nanny taxes are Social Security and Medicare (FICA) taxes, and you’re legally obligated to withhold them from your employee’s earnings if you pay them $2,200 or more in calendar year 2020”. ![]()
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