Annual Raise

[Anonymous]

Why would a nanny agency even tell a parent this. After they match you with a nanny, are they still in your life?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card.

Ooh, very wrong. If this were true you could just pay minimum wage and give employees a $50k cash bonus at the end of the year. Just because some or even many people do it doesn’t make it legal.
Payroll services actually often withhold taxes at a higher rate than salary to be conservative, because of the uncertain implications bonuses and discretionary payments have on the final tax bracket at year-end.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card.

What are you talking about? Care to cite the IRS reg? It’s taxable, sorry… that’s like tax 101…

Sorry, not sorry. It’s a CASH bonus the norm and not taxable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card.

Ooh, very wrong. If this were true you could just pay minimum wage and give employees a $50k cash bonus at the end of the year. Just because some or even many people do it doesn’t make it legal.
Payroll services actually often withhold taxes at a higher rate than salary to be conservative, because of the uncertain implications bonuses and discretionary payments have on the final tax bracket at year-end.

We’ve never given taxable bonus to our nannies; it has always been a personal check and would not run the bonus through the payroll company, not necessary and certainly not illegal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card.

Ooh, very wrong. If this were true you could just pay minimum wage and give employees a $50k cash bonus at the end of the year. Just because some or even many people do it doesn’t make it legal.
Payroll services actually often withhold taxes at a higher rate than salary to be conservative, because of the uncertain implications bonuses and discretionary payments have on the final tax bracket at year-end.

Any person can gift any other person up to $16,000 as a gift each year and it's not taxable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card.

Ooh, very wrong. If this were true you could just pay minimum wage and give employees a $50k cash bonus at the end of the year. Just because some or even many people do it doesn’t make it legal.
Payroll services actually often withhold taxes at a higher rate than salary to be conservative, because of the uncertain implications bonuses and discretionary payments have on the final tax bracket at year-end.

Any person can gift any other person up to $16,000 as a gift each year and it's not taxable.

https://www.cpa-wfy.com/giving-gifts-to-employees-irs-wants-its-share/
Gift tax exemption only applies for personal gifts, not employer-employee gifts.

Decades ago, in a landmark case, the U.S. Supreme Court established that a transfer only constitutes a tax-free gift if it is made through “detached and disinterested generosity” or “out of affection, respect, admiration, charity or like impulses.” (Duberstein, 363 U.S. 278, 1960)

As I said, I know plenty of people just do a cash bonus (and many people just pay the whole salary as cash under the table too), because the IRS is not likely to hunt a UMC household down for that kind of stuff unless there's some other reason they're investigating you. But I would say this is along the lines of restaurants that don't report all cash earnings or people who don't report all cash tips as supplemental wages -- common, but not actually legal.