13 Steps to Hassle-Free 2017 Nanny Taxes

This is the time of year when many household employers are scrambling to pull together 12 months’ worth of pay and tax information so they can issue their employee a W-2, submit Form W-3 to the Social Security Administration, and begin preparing Schedule H to file with their personal tax return. This is especially true for 2017 nanny taxes since this is the first year that the deadline to submit forms W-2 and W-3 has been moved up to January 31.

It can be overwhelming on top of all of the other tax season aggravations and headaches.

If this sounds like you, make a commitment now to hassle-free 2017 nanny taxes. By following these 13 steps, you won’t have a mad scramble to get your forms submitted on time. In the long term, these steps will keep you in line with tax, wage, and labor laws that apply to household employers. This will help reduce the risk of fines and/or penalties for noncompliance.

1. Purchase workers’ compensation insurance (if required by law in your state).
2. Adhere to the federal minimum wage requirement ($7.25/hour). Your state or local minimum wage may supersede federal law.
3. Pay overtime of one and half times your employee’s hourly rate for all hours worked above 40 in a week. This is federal law.
4. Follow all applicable tax, wage, and labor laws in your state including a Domestic Workers’ Bill of Rights.
5. Read and respond to government notices or alerts.
6. Monitor changes to tax, wage, and labor laws that could potentially affect household employment.
7. Prepare and distribute pay stubs (even if paying by direct deposit). Include: employer name and address, employee name, pay period start and end dates, check date, check number, gross earnings, total deductions, net pay, current and YTD payroll information, PTO accruals, and withholding allowances (based on employee’s W-4).
8. File and remit quarterly state employment taxes.
9. File and remit quarterly federal taxes using Form 1040-ES.
10. Prepare and distribute Form W-2 to your employees by January 31 (for the previous year’s taxes and wages).
11. Prepare and file Copy A of Form W-2 and Form W-3 with the Social Security Administration by January 31.
12. Prepare Schedule H and file with your federal income tax return (Form 1040).
13. Keep records in a safe place for at least seven years.

Interested in learning more about getting your 2017 nanny taxes done right? Download The Complete Guide to Household Payroll. If you have questions about your employment situation, call (800) 929-9213 for a free consultation with one of our household employment experts.