Hiring household employees comes with responsibilities and legal obligations. Understand the essential aspects of hiring household employees, employment taxes, and how to ensure a smooth and lawful employment relationship.
When paying your nanny, you can pay them in arrears or current. Here are the differences between the two methods and why paying in arrears may work best for your family.
For a few reasons, like qualifying for a health insurance subsidy or taking home more money, a nanny may want to be paid half on and half off the books. This may seem like a reasonable compromise especially if you like the caregiver. Plus, you save on taxes too. Everyone is happy. Right? Here are four key reasons why this is a bad idea even if well-intentioned.
Don’t create risks or hassles for yourself with a cheap nanny tax service. They’ll do the bare minimum: pay your employee and take out some withholdings. You need more than that to comply with tax, wage, and labor laws. You deserve the support and attention of household payroll professionals when handling your nanny taxes.
If your employee lives and works in different states, they may not be required to file taxes in both. Certain state have what is called a reciprocal agreement.