With our first nanny who lived in DC we used Intuit online household employee payroll service and it worked just fine. It wasn't all that straight forward to set up, and we had to do the legwork to get our DC withholding and unemployment account numbers but after those steps it worked pretty well. We could even do direct deposit without an additional fee. It told us when and how much to pay for both our federal and state tax, provides the tax forms for both state and federal, saves all pay-stubs, and prepares a W2 at the end of the year. For all of these services we paid $22/month for this payroll service. ($264/year)
Unfortunately it doesn't seem to work with our new nanny since she lives in Maryland, and Intuit won't let me withhold her State income tax since she works in DC with the household employee payroll service. I could switch to a small business owner account to accommodate this situation - but then it would not produce the schedule H form that has to be submitted with the the 1040. Plus the price of this service would be $468 ($39/month). Thus I'm seeking your suggestions on other payroll services that offer a similar package and rate. I know that many folks use NanniTaxes - but this seems pretty expensive in comparison to what I've been using. I definitely don't feel comfortable figuring out all the taxes on my own - so appreciate your recommendations on a service. Your input much appreciated! |
Most of the services that would handle this all easily for you (and there are several for which this would be no problem) will be significantly more expensive. It's a tradeoff - your time, energy, stress versus the cost/relief of using an agency. |