Why a Household Payroll Professional Should Handle Your Nanny Taxes

You found the perfect, caring nanny for your young children, or you’ve teamed up with other families and hired an experienced private teacher for your learning pod.

It took some work to make the right hire but you feel relieved that your kids are in capable hands. No other worries, right?

Maybe.

Don’t create risks or hassles for yourself with a no-frills nanny tax service or do-it-yourself software. You are now a household employer and with it comes tax, wage, and legal responsibilities that can land you in financial trouble if you neglect your obligations or make mistakes.

A cheap service or DIY software will do the bare minimum: pay your employee and take out some withholdings.

But there is much more to being a household employer and they leave it up to you to figure it all out. The end result could cost you more than going with a full-service, comprehensive payroll firm. Things get even more complicated if there are multiple families involved in a nanny share or learning pod.

Will your service take out and/or make mandatory contributions to a state paid family or sick leave program? If you live in New York; Massachusetts; Washington, D.C., or one of the other states and cities with paid leave laws, this is an employer obligation even for families that hired someone to work in their home.

Do you know the minimum wage rates and overtime laws for your state and city? Do you know when those rates will go up so your nanny’s pay will stay compliant with wage laws?

Will your low-cost service advise you on workers’ compensation insurance? Coverage is required for household employers in many states and the fines for non-compliance can be thousands of dollars a month.

What about domestic worker protections? Several states and cities have a domestic workers’ bill of rights that lay out the rights of household employees and the responsibilities of their employers.

We can go on and on, but the bottom line is this:

Do you have the guidance you need to be compliant with federal, state, and local tax, wage, and labor laws and avoid financial penalties?

Also, ask yourself, will this firm look out for me? Or will they leave me on my own to figure a lot of this stuff out?

The IRS estimates that it will take a household employer 60 hours a year to manage their nanny tax and payroll obligations. Not only is this time better spent doing something – anything else – but who has that kind of extra time? Not you. But you will need to find that kind of time when you go with a cheap service with little to no client support.

To save yourself this trouble and make a smarter decision, here are seven questions to ask a nanny tax and payroll provider.

At GTM Payroll Services, we have a team of certified payroll professionals, nanny tax experts, CPAs, and insurance brokers standing by to help you with any task and answer any question. We have been guiding families with their nanny payroll and taxes for 30 years and have earned the trust of more than tens of thousands of households across the country.

We are confident that you will find GTM to be the best fit for your family.

Call (800) 929-9213 for a complimentary, no-obligation consultation with a household employment expert. We will answer your questions, review your household hire, and provide guidance on your tax and labor obligations.

As a client, you will get our guarantee. If you receive a notice from the IRS, or any other tax agency, based on a filing that GTM Payroll Services made, we will work with the agency on your behalf to resolve the issue. If we are at fault, we will pay all the associated penalties and fines.

That is a payroll service that removes the risks, hassles, and worries of nanny taxes. Saving you time and money in the long run.

You made the right decision to legally employ a household worker. Don’t make the wrong choice to save a few dollars in the short term with a cheap payroll service.

Hiring a nanny?

Download Your Guide to Hiring a Nanny. In this guide, we lay out the steps on how to hire a nanny the right way and maintain a strong relationship with your employee.