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Nanny tax compliance for accountants goes beyond cutting paychecks and remitting taxes for clients who have household employees. Workers’ compensation, employee classification, timekeeping, and more can impact compliance.
Even for experienced accountants complying with all of the tax, wage, and labor laws around household employment can be confusing. It’s easy to make an unintentional mistake and that could lead to fines and penalties, for your client and potential legal action from the employee. If your client’s expected you to figure this all out, they may sour on their relationship with you and your firm and think about moving their business elsewhere. It could even be your client’s mistake with poor timekeeping leading to their employee being underpaid and not enough remitted for taxes.
If your clients turn to you to help manage their nanny taxes, you’ll want to see weekly time sheets, a pay rate at or above minimum wage, and overtime hours paid at time and a half. There are other considerations as well including workers’ compensation, worker classification, and more.
Review our new infographic on common nanny tax mistakes that lead to non-compliance, fines, and penalties.
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Don’t want the hassles of managing your clients’ nanny taxes and payroll on your own? Turn to GTM. We’ll handle their payroll processing, tax filings, insurance, compliance, and year-end forms while treating them with the same high level of support they’re accustomed to with your firm. At the same time, you stay in control with online access to your client’s account and documents. Call (800) 929-9213 to learn more and get started.
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