38: Figuring Out Nanny Taxes

While the coronavirus pandemic only further grew the industry, many families already used nannies to help take care of their children and elderly relatives. Whether it’s the potential savings, uncertainty about returning to a shared environment, or a multitude of other reasons; in-home care provides parents and caretakers a ton of benefits. However, it also comes with hurdles as well, with nanny taxes being one of the chief concerns for those interested.

Nanny taxes don’t have to be complicated

On this episode of the Taxgirl podcast, Kelly is joined by Jay Schulze, the president of HomeWork Solutions, a company that provides household employers an easy way of handling the nanny tax burdens that arise. Kelly and Jay talk about the risks and rewards of becoming a household employer as well as reasons why not having your nanny on the books could come back to haunt you.

Listen to Kelly and Jay talk about nanny taxes:

• How COVID-19 impacted childcare
• Nanny shares
• The distinction between employee and independent contractor
• Having multiple nannies over a year
• Do you need worker’s compensation insurance
• Price of nanny tax services
• The risks when becoming a household employer
• The amount of unpaid taxes among household employers
• Nanny tax breaks
• Household employer tax breaks
• FICA taxes
• What you should look for from a nanny tax service
• How to handle household employees that don’t want to pay taxes
• Nannygate
• Senior care
• How to handle bonuses to household employees
• Finding a payroll service for nanny taxes

More about Kelly Phillips Erb:

Kelly is the creator and host of the new Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things that she does is help folks out of tax jams, and hopefully, keep others from getting into them.

Links mentioned:

Kelly’s Website – Taxgirl

Homework Solutions - Website