How Can I Get Caught Not Paying Nanny Taxes?

It’s easy to get caught not paying nanny taxes when you have a household employee. And you’ll end up paying much more in fines and penalties than in the actual tax responsibility you chose to ignore. Here’s how.

Transcript

It’s easy to get caught not paying the proper taxes when you have a household employee like a nanny, in-home senior caregiver or housekeeper.

And you’ll end up paying much more in fines and penalties than in the actual tax responsibility you chose to ignore.

Here’s how…

You no longer need your nanny and she files for unemployment. There’s no record of her holding a job or even your family being an employer. Since you didn’t pay unemployment taxes, you’ll incur penalties that can add up to 50 percent of the tax due. That’s on top of the unemployment taxes you neglected to pay while employing your nanny.

Or…

Your nanny gets hurt taking care of your children. A workers compensation claim is opened so she can get financial help with medical bills and lost wages from missing work due to the injury.

But you don’t have the required coverage.

Fines and penalties can be substantial. In New York State, for example, you could face a fine of $2,000 per every 10-day period of noncompliance.

Perhaps, you have a falling out with your nanny and decide to let her go. At the end of year, she doesn’t get a W-2 as employers are required to provide their employees at tax time. She decides to contact the IRS about the missing W-2. Not only do you need to pay back taxes, the IRS is authorized to penalize you up to 100 percent of the tax you owe.

It’s best to take care of your back tax obligations as soon as possible and start paying your nanny the right way going forward.

GTM can help. We offer back tax work at reasonable rates and can get your nanny payroll and taxes set up in no time.

GTM relieves the risks, hassles, and worries of nanny taxes and payroll for thousands of families likes yours.

Call (800) 929-9213 for a free, no obligation consultation with a household employment expert.

We’ll be happy to help!