Need some help and advice!!

[Anonymous]

This is my first time employing a nanny so sorry for the stupid question. We have a nanny currently that we pay 100% on the books. Recently she asked me if we could pay her the same rate off the books which she said would save me money too since we won't be paying our portion of FICA taxes. She told me I could consider the money we give her as a "gift"? This is too gray area for me so I don't know. Any advice? To me this sounds like tax fraud and I could get into a lot of trouble if someone found out.

[Anonymous]

Anonymous wrote:This is my first time employing a nanny so sorry for the stupid question. We have a nanny currently that we pay 100% on the books. Recently she asked me if we could pay her the same rate off the books which she said would save me money too since we won't be paying our portion of FICA taxes. She told me I could consider the money we give her as a "gift"? This is too gray area for me so I don't know. Any advice? To me this sounds like tax fraud and I could get into a lot of trouble if someone found out.

It is tax fraud and you will be held accountable if found out. Protect your future and don't do this. This could come back several years from now and ruin your life.

[Anonymous]

It is tax fraud, OP. You could give her her vacation pay or any overnight/travel pay in cash without worrying much.

[Anonymous]

Don’t do it, if your nanny leaves on bad terms, she could turn you in.

[Anonymous]

And the amount you are allowed to gift a friend or relative is much lower than a nanny's yearly pay.

[Anonymous]

Illegal.

[Anonymous]

You’re already paying her on the books so if you stop then it will be a red flag for the IRS

[Anonymous]

Anonymous wrote:You’re already paying her on the books so if you stop then it will be a red flag for the IRS

No, no need to lie about this. People quit nanny care all the time. Not a red flag at all.

[Anonymous]

It is tax fraud. I don't think it's going to ruin your life. You may get hit with having to pay the taxes plus fees at a later date if this gets found out. I read somewhere that something like 90% of employers pay household employees under the table.
I would only do this if she was married or had another source of income. She will officially have no job history and no income, so she won't be able to collect unemployment, use credit to buy a house or car, or collect social security.

[Anonymous]

I would be really resentful of this nanny's trying to manipulate you into doing something illegal. I guess she can find another employer willing to pay her under the table, but she knows this is not the way you do things.