{"id":16748,"date":"2018-11-26T14:34:37","date_gmt":"2018-11-26T19:34:37","guid":{"rendered":"https:\/\/gtm.com\/household\/?page_id=16748"},"modified":"2023-10-05T14:13:50","modified_gmt":"2023-10-05T18:13:50","slug":"nanny-taxes-not-worth-the-risk","status":"publish","type":"page","link":"https:\/\/gtm.com\/household\/partnership-programs\/nanny-taxes-not-worth-the-risk\/","title":{"rendered":"Not Worth the Risk: The Very Real Possibility of Losing Clients over Nanny Tax Issues"},"content":{"rendered":"

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Not Worth the Risk: The Very Real Possibility of Losing Clients over Nanny Tax Issues<\/h1>\n

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The Risks of Nanny Taxes<\/h2>\n

There are several risks involved when a family hires an employee to work in their home even if you or your client are trying to get nanny taxes right.<\/p>\n

But the dangers extend beyond fines and penalties for your client\u2019s potential non-compliance with household employment laws.<\/p>\n

Get nanny taxes wrong for your client and they could point the finger at you and your firm even if you aren\u2019t at fault. They expect expert advice and for you to steer them away from trouble. You could jeopardize your client relationship \u2013 over even lose the client altogether \u2013 over the mishandling of nanny taxes or incorrect guidance.<\/p>\n

Since families that hire household employees tend to be high-net-worth clients, there could be a significant amount of business on the line.<\/p>\n

Here are three tax and payroll issues that can trip up you and your client.<\/p>\n

1. Failing to Pay Minimum Wage or Overtime<\/h3>\n

Household employees are required to be paid at least minimum wage, which will be the highest of federal, state, and local rates. Beyond a few exceptions (mostly around live-in workers), they also receive time-and-a-half for hours worked over 40 in a week. Not being paid legally could lead a dissatisfied employee to file a lawsuit for back wages and subject your client to an IRS audit and paying back taxes with penalties and interest.<\/p>\n

2. Poor Timekeeping Records<\/h3>\n

Without accurate timesheets \u2013 or lacking any type of timekeeping \u2013 an employee could be underpaid for the hours they worked and may not get the required overtime pay. Once again, your client is exposed to legal action. This can be an especially attractive option for someone who is working for a high-net-worth family.<\/p>\n

3. Mistakes on Payday<\/h3>\n

Your client could be paying their employee in cash or writing a personal check. However, some states require employers to distribute paystubs along with wages even if paying electronically. The paystub includes information like hours worked, pay rate, overtime rate, deductions, withholdings, and more.<\/p>\n

States may also determine how often a worker should be paid. In New York, for example, household employees are required to be paid weekly.<\/p>\n

Why These Issues are Costly<\/h2>\n

Your client supplies you with how much they paid their worker and you file the appropriate taxes on a quarterly basis. Simple, right?<\/p>\n

But what happens if, in the rush to meet the quarterly deadline, you\u2019re not asking your client the right questions about overtime and minimum wage? Or your client has poorly-kept records of hours worked and pay.<\/p>\n

Either way, mistakes are made. Perhaps you do ask the right questions and your client doesn\u2019t know the answers, so they just take a guess on hours worked and wages.<\/p>\n

Their employee could wind up being underpaid and consider legal action for back wages. Even if your client gave you bad information, they could point a finger at you as someone who was supposed to give professional advice and prevent this from happening. You\u2019re now faced with an angry client who thought you were handling this for them. They could leave your practice and take all their business with them.<\/p>\n

Beyond payroll and taxes, there are other problems that could cause trouble for your client.<\/p>\n

Lack of Workers\u2019 Compensation Insurance<\/h3>\n

Workers\u2019 compensation is required for many household employers and is often overlooked or skipped. However, an injury on the job could be financially devastating to a family who would be on the hook for their employee\u2019s medical costs and lost wages as well as fines and penalties for lack of coverage. It can easily add up to tens of thousands of dollars. Even when workers\u2019 compensation coverage is voluntary, a policy may be a good idea to help protect your client.<\/p>\n

Ignoring Household Employment Nuances<\/h3>\n

Several states have passed Domestic Workers\u2019 Bills of Rights to provide protections to household employees. These laws could determine days of rest, sick leave, and pay frequency as well as require a work agreement<\/a>. Sick leave and paid family leave laws may also extend to household employees. Fines and penalties can be imposed if these mandates aren\u2019t followed.<\/p>\n

Avoid the Needless Risks. Stop Doing Nanny Taxes Yourself.<\/h2>\n

You have better things to do then trying to figure out a client\u2019s nanny taxes and chasing their payroll records. You may find yourself up against a tax deadline while furiously tracking down who worked when. That\u2019s not a good use of your time when you have more profitable work that demands your attention.<\/p>\n

Nanny taxes likely make up a small part of your work for a client but may pose the biggest risks to the relationship and lost business. You\u2019re probably not making any money off nanny taxes, yet it\u2019s a huge hassle and jeopardizes your client relationships. And we get it.<\/p>\n

You don\u2019t want to lose a client by not handling all their tax obligations.<\/p>\n

What\u2019s the solution?<\/h3>\n

You need a partner like GTM Payroll Services with the experience and expertise to handle nanny taxes and payroll while delivering extraordinary service that your client expects.<\/p>\n

With GTM, your clients will work with a firm that places ecstatic families at the very center of their business and have peace of mind knowing their household payroll is being done right.<\/p>\n

You\u2019re no longer dealing with nanny taxes and can focus on services that make you the most money. At the same time, you keep your high-value clients, stay in control of the relationship, and continue to deliver exceptional service.<\/p>\n

It\u2019s a win-win for everyone involved.<\/p>\n

How We Partner with You<\/h2>\n

Simply refer your clients to us. We\u2019ll do the rest. With GTM as your nanny tax partner, you get the best of both worlds. The time-consuming and confusing administrative tasks are left to us while you remain in control of the client relationship.<\/p>\n

With our online portal for accountants, you can view your client\u2019s payroll and tax data and download their tax forms. GTM\u2019s partner manager will help with any questions you have while your client will be supported by an experienced team of household employment experts.<\/p>\n

Why GTM?<\/h2>\n

We\u2019ve been in the nanny tax business for nearly 30 years and have worked with tens of thousands of families over the years. Today, we process more than $1 billion in payroll each year for more than 44,000 employees across the country. We\u2019ve seen it all in household employment and can handle and advise on any hiring situation.<\/p>\n

Trust<\/h3>\n

Fortune 500 companies rely on us to manage payroll for their executives and clients. We also partner with hundreds of accounting firms, family offices, wealth advisors, and placement agencies. They put their clients in our care and expect them to receive the same type of personal attention they provide. We\u2019re up to the task!<\/p>\n

Services<\/h3>\n

We have the experts on staff to support your clients as well as the services they need.<\/p>\n

We offer:<\/p>\n