https://boards.hellobee.com/ Pregnancy, Baby and Parenting blog, by Hellobee en Tue, 07 Apr 2026 08:35:39 +0000 https://boards.hellobee.com/topic/nanny-tax-hell#post-29439 Wed, 07 Dec 2011 17:28:47 +0000 irene 29439@https://boards.hellobee.com/ <p>@mrstilly: So you mean your "in-home daycare provider" (nanny I assume) has also LLC'd herself as a business?</p> <p>The IRS lady just confirmed on the phone with me that it is illegal if we don't do a W-2. She said since I control when my nanny shows up at my house, what to do (taking care of my child) and how to do it using my resources, she is my employee. But that's the same with a cleaning crew (they come at the time I tell them to, and they use my vaccum cleaner, and I could give them instructions of how i like things to get cleaned), or a handy man (I also tell them when I want them to come, what I want to do (eg. hang a picture), and how I'd like to do it). </p> <p>I don't understand why the government doesn't let us do 10-99 with a nanny. Makes you wonder why so many people do it under the table or just quit to become a stay at home mom. </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29411 Wed, 07 Dec 2011 16:40:46 +0000 irene 29411@https://boards.hellobee.com/ <p>@Mrs. Bee: Thanks for the info! I'll check them out.... </p> <p>With nanny share, wouldn't the tax situation be even more complicated (ie. who's paying how much and how do you even report taxes with that)? My neighbor is pregnant too (her due date is April and mine is Feb), and I actually thought about asking if they are interested in doing nanny share.... but with an additional layer of tax complication I am biting my tongue on that. </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29403 Wed, 07 Dec 2011 16:26:39 +0000 ecogirl 29403@https://boards.hellobee.com/ <p>The agency we hired our nanny through actually set everything up for us. I actually just got health/dental/vision benefits for her too and it was so confusing! I called some agencies to find out how they give benefits and then just bought a policy through our insurance provider. </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29395 Wed, 07 Dec 2011 16:14:54 +0000 mrstilly 29395@https://boards.hellobee.com/ <p>I've never really thought too much about this before. We went with an in-home daycare provider, but she is licensed through the state. We're going to deduct day care expenses, so I guess I need to figure out what that entails. </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29387 Wed, 07 Dec 2011 16:08:11 +0000 Mrs. Bee 29387@https://boards.hellobee.com/ <p>@irene: we use <a href="http://payprep.com/" rel="nofollow">http://payprep.com/</a></p> <p>I'm not sure if he does work outside of ny since the tax laws vary state to state. But worth contacting him. His rate is $380/year which is less than the other services out there. </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29386 Wed, 07 Dec 2011 16:06:39 +0000 irene 29386@https://boards.hellobee.com/ <p>@mrbee @Mrs. Bee: What payroll service do you guys use? </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29383 Wed, 07 Dec 2011 16:03:39 +0000 Mrs. Bee 29383@https://boards.hellobee.com/ <p>it is most definitely illegal to pay a nanny as an independent contractor. the law is very clear about that - she is an employee.</p> <p>as far as the payroll service we used, it was $95/quarter. They took care of the W2s and paperwork. All I had to do was mail in a check each quarter for the taxes. The service I used was just really great (he's a local accountant that specializes in nanny taxes) because he always answered any questions I had. </p> <p>There are services like Nannytax or 4Nannytax that you may be able to use.</p> <p>But... we ended up paying so much more for a nanny because we paid on the books. And you're right that most nannies have no idea how much taxes are taken out and expect they will take home $25k (or close to it) if that's what you offer. Most parents around here pay their nannies more if they're paying them on the books. 75% pay off the books and I understand why... it's much more work to pay on the books, and it costs much more for you (we spent an additional $800/year on worker's comp and unemployment insurance) and your nanny to pay on the books.</p> <p>i don't know what we'll do this time around... i guess it will depend on the candidates! </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29375 Wed, 07 Dec 2011 15:51:31 +0000 mrbee 29375@https://boards.hellobee.com/ <p>Bee wrote a post on paying your nanny legally!<br /> <a href="http://www.hellobee.com/2011/11/11/the-legal-nanny/" rel="nofollow">http://www.hellobee.com/2011/11/11/the-legal-nanny/</a></p> <p>We use a payroll service... it's just too hard otherwise. This article was a bit scary!<br /> <a href="http://www.businessweek.com/careers/workingparents/blog/archives/2006/01/those_dreaded_n.html" rel="nofollow">http://www.businessweek.com/careers/workingparents/blog/archives/2006/01/those_dreaded_n.html</a> </p> https://boards.hellobee.com/topic/nanny-tax-hell#post-29369 Wed, 07 Dec 2011 15:45:41 +0000 irene 29369@https://boards.hellobee.com/ <p>I am in nanny tax hell.</p> <p>I am in the process of figuring out on nanny taxes because my husband is adamant about being legal (funny thing is he doesn't go do research himself). So I read that as long as you are planning to pay a household employee over $1,700 a year, you are required to put her on W-2, withholding taxes, paying social security, medicare, unemployment taxes....etc. I found myself reading up on IRS Publication 926 (2012) and barely understanding what's going on. </p> <p>Then I found a nanny tax calculator: <a href="https://secure.gtmassociates.com/calculator.aspx" rel="nofollow">https://secure.gtmassociates.com/calculator.aspx</a></p> <p>It is very depressing. Let's say you offer a 25k salary to your nanny, but her take home pay is really about $19,800. This is common knowledge for people who had experience working in the corporate America, but I have been talking to several nanny candidates now, and a big portion of them are not even used to the idea of being paid legally (!) So when they ask for 25k, they really expect to pocket 25k with no tax deduction. And I am talking about experienced, full-time nannies.</p> <p>Not to mention you may have to pay an extra $600 + to hire a payroll service for the ease of mind.</p> <p>Then, I talked to this other candidate. She said she is LLC'd, and she invoice her families weekly, and she has her own tax ID and all, and will do her taxes at the end of the year on her end. However, she will be working from our home. This almost sound too good to be true, but I wonder if it is even legal. I am now on hold on the phone with IRS just to see if that's even legal to do.</p> <p>What is your solution to the nanny tax issue? Did you hire a payroll service, or do you figure it out on your own using Quicken/Quickbooks...etc.? Is there an easy way to do W-2, or are you working with a nanny who has LLC'd herself to provide you childcare service without you having to worry about taxes? (and if so, have you gotten into trouble with the IRS?) </p>