Paying over time off the books

[Anonymous]

We pay our nanny for 50 hours a week though she generally only works 42 (we committed to paying for 50 to guarantee flexibility). We pay her above the table for all of this. She has asked that for the hours she doesn't actually work in any given week, we pay her directly. What risk would there be in doing this? Since she doesn't even work these hours, it is annoying to pay taxes on them.

[Anonymous]

Aside from the "accounting", I don't see the problem with it.

[Anonymous]

Yes. You are cheating her as this is a large amount that will not be on her earnings for social security.

[Anonymous]

Anonymous wrote:Yes. You are cheating her as this is a large amount that will not be on her earnings for social security.

Wouldn’t her getting to keep all of it vs pay taxes and get a portion of the taxes back in SS overall result in more money for her? She’s close to SS age

[Anonymous]

Technically, it's just illegal. It's essentially a bonus, and bonuses must be taxed.

But no one is ever going to check.

[Anonymous]

You are paying an extra stipend to your employee for her flexibility... you are paying your employee, therefore it must be taxed.

[Anonymous]

I wouldn't particularly feel comfortable paying partly on the books and partly off as that might be a nanny trying to get benefits by making her income seem lower, and it also leaves me open to a disgruntled nanny later trying to get me in trouble for not paying legally... that's part of the benefit of me paying as the employer.

But the amount you are talking about seems smallish (bigger than a bonus though) so you have to figure out what you're comfortable with

[Anonymous]

Anonymous wrote:Technically, it's just illegal. It's essentially a bonus, and bonuses must be taxed.

But no one is ever going to check.

This. All boils down to how comfortable you are cheating on your taxes, and helping her to cheat on hers.

[Anonymous]

it's not a big deal. anyone telling you otherwise is crazy uptight. i've known tax attorneys who do that for domestic staff-anyone who tells you some boogeyman from the IRS will come find you for this is paranoid.

[Anonymous]

She shouldn’t be asking you to do this.

[Anonymous]

What's the point of being partly legal/partly illegal?

[Anonymous]

Anonymous wrote:What's the point of being partly legal/partly illegal?

As a nanny you want to be seen as a legal tax paying person.... if you receive overtime in cash you can "pretend" to make less then you actually do...then you can qualify for services and insurance that you would not qualify for otherwise.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What's the point of being partly legal/partly illegal?

As a nanny you want to be seen as a legal tax paying person.... if you receive overtime in cash you can "pretend" to make less then you actually do...then you can qualify for services and insurance that you would not qualify for otherwise.

Still illegal on both sides and if the employer is going to the trouble of paying/preparing W2s, etc, it seems inconsistent. Let the nanny cheat elsewhere if you are a "legal" employer or go completely "under the table" and save on the taxes.