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I can address the tax issue - according to IRS Publication 926 you do not pay employment taxes on an employee who is under the age of 18 at any time during the year.
Exception: Count these wages and pay taxes if providing household services is the employee's principal occupation. If the employee is a student, providing household services is not considered to be his or her principal occupation.
Exception: Count these wages and pay taxes if providing household services is the employee's principal occupation. If the employee is a student, providing household services is not considered to be his or her principal occupation.
Anonymous wrote:I would check with the IRS on this one. I beleive that FICA tax is a special case, and your employer can pay your portion without additional tax burden to you. That's definitely not the case with income tax.
This is only partially correct. An employer can pay your portion of FICA - however they must include the employer paid employee FICA in your wages subject to income taxes (Federal and State) on your W-2 form - you do pay income tax on the employer-paid-employee-FICA. Please see Publication 926 p. 7 Not withholding the employee's share.
OP the answer is NO, nanny is not a statutory employee.
Personal income tax preparers - whether they hold a CPA, EA or just a registered income tax preparer - typically are not well versed in payroll taxes and payroll reporting.
By the same token, although I AM a registered income tax preparer (I need the certification for what I do), and I am a subject matter expert on household employment taxes and reporting, if you gave me a Form 1040 Schedule F to prepare, I would have to pull out the book and study up on it to get it right.
Moral of the story, being an accountant does not make you an expert on the entire US tax code
. We all have our areas of expertise.
Personal income tax preparers - whether they hold a CPA, EA or just a registered income tax preparer - typically are not well versed in payroll taxes and payroll reporting.
By the same token, although I AM a registered income tax preparer (I need the certification for what I do), and I am a subject matter expert on household employment taxes and reporting, if you gave me a Form 1040 Schedule F to prepare, I would have to pull out the book and study up on it to get it right.
Moral of the story, being an accountant does not make you an expert on the entire US tax code
. We all have our areas of expertise.
Not only is it wrong to issue a 1099 to a nanny, but the IRS has a temporary amnesty program (through June 30) to allow families who have done it wrong in the past to come forward, pay a minor fine (not back taxes) and do it correctly (W-2) going forward.
http://www.info.4nannytaxes.com/blog-0/bid/95153/Nanny-Tax-Amnesty-Prelude-to-IRS-Enforcement
http://www.info.4nannytaxes.com/blog-0/bid/95153/Nanny-Tax-Amnesty-Prelude-to-IRS-Enforcement
nannydebsays wrote:Generally speaking, nannies do not have the protection against that sort of thing that people who work for employers with more than 1 employee have.
So, yes, it's likely legal, but it's kind of a jerky thing to do unless the issue simply cannot be resolved positively.
Yes they can. You can be fired for any reason or no reason.
There is never a fee to close your account with HomeWork Solutions. However the fee OP refers to is for us to correspond on her behalf to the taxing authorities to close her tax accounts. This can be a letter, filling out a form, etc. and these often need to be submitted multiple times before the desired action is taken. In DC this can take from months to years sadly. There has to be a sink hole where they process these requests!
And as I previously stated the year end document fees are not only standard but also clearly stated at the link above where the service fees are listed.
I again invite OP to give me a call to discuss.
And as I previously stated the year end document fees are not only standard but also clearly stated at the link above where the service fees are listed.
I again invite OP to give me a call to discuss.
HomeWork Solutions offers sample live in and live out nanny work agreements online here: http://www.4nannytaxes.com/index.cfm/resources/forms/
We also offer free telephone consultation - feel free to phone with your questions.
We also offer free telephone consultation - feel free to phone with your questions.
OP, as an owner of HomeWork Solutions, I would love the opportunity to speak to you personally.
We clearly post our year end document fees online.
http://www.4nannytaxes.com/index.cfm/services/payroll-service/
Our primary competitor charge $85 for the same service. It too is clearly listed on their website.
Give me a call next week, I would be happy to speak to you directly.
We clearly post our year end document fees online.
http://www.4nannytaxes.com/index.cfm/services/payroll-service/
Our primary competitor charge $85 for the same service. It too is clearly listed on their website.
Give me a call next week, I would be happy to speak to you directly.
Topics 2 - 5 in our Nanny Tax Basics FAQ give you a quick under-5 minutes overview.
http://www.4nannytaxes.com/index.cfm/faq/nannyhousekeeper-faq-list/
http://www.4nannytaxes.com/index.cfm/faq/nannyhousekeeper-faq-list/
Depends if you already filed the bad copy with the SSA. If you did, W-2C. If you did not and you can reach the nanny to say "Hey don't use that W-2, I am fixing it and will reissue" a W-2 is fine.
However, given that your nanny has been gone so long a conservative approach would be to file the bad W-2 with the SSA, then do the W2-C route so there is no possibility that nanny uses the wrong form.
However, given that your nanny has been gone so long a conservative approach would be to file the bad W-2 with the SSA, then do the W2-C route so there is no possibility that nanny uses the wrong form.
Anonymous wrote:Anonymous wrote:Anonymous wrote:If you DIY, I suggest paying twice a month rather than weekly. It makes it much easier to calculate anything that has to be quarterly, like unemployment insurance in MD.
You are right about the tax calculations, but it complicates overtime calculations which are based on a 40 hour work week.
Not really. You only pay overtime after the 40 hours, so when the overtime occurs, you calculate it. If you pay her on the 15th, which is a Wednesday, and she hasn't hit any overtime for that week yet, then you don't include it. If she hits 41 hours on Thursday, it gets paid out when she gets paid for Thursday, which would be in the next pay period. Either way, you still have to count up the hours she works each day and add them all together.
Most employers of hourly staff pay weekly or biweekly. You can technically satisfy overtime requirements semimonthly, but it is more complicated because OT is calculated on a 7 day work week. You need to first determine what your work week is (Friday - Thursday for example). Then you need to keep payroll records and calculate hours worked in that period.
Take this March for example. You will pay on the 15th and the 31st.
So March 1 - 7 She works 45 hours - 40 hours regular, 5 OT
March 8 - 14 she works 36 hours - 36 regular
March 15 she works 8 hours - all regular.
So on the 15th you pay for 84 regular hours and 5 OT
March 15 - 21 she works 45 hours. You have already paid her for 8. So you will have 32 regular hours and 5 OT in the next payroll.
March 22 - 28 she works 45 hours. 40 hours regular, 5 OT
March 29 - 31 she works 8 hours.
So on the 31st you pay for 80 regular hours and 10 OT
March 29 - April 5 she works 45 hours. You have already paid her for 8. So you will have 32 regular hours and 5 OT in the next payroll. ...
So you see the math can be worked out but it is more recordkeeping having to keep looking back at work weeks that crossed payroll periods, and I have seen many people get this totally wrong in my 20 years in payroll.
Anonymous wrote:Anonymous wrote:I would consult with an immigration attorney.
+1. you need specialized help. it has depends on the type of VISA your nanny has
+1 times 1000!!! This needs to be addressed by a qualified professional BEFORE she is out of status.
Anonymous wrote:IMO she should only be held responsible for whatever the deductible is, as that's all she'd be paying if the claim were submitted.
I agree with this. If you decide not to submit the accident to your insurance that is your decision, and she should not be penalized for it.
The State box will be MD and the taxable state wages are almost always the same as Box 1. There is no local wage - in MD they bundle the state and local wage into one collection/tax document.
Fielding a lot of concerns regarding net wage agreements - when the nanny and family agree to a take home wage but fail to define what they mean by "cover the taxes." Our FAQ goes into this in detail. In general, we always try to steer a client to agree to a GROSS wage so these misunderstandings don't happen. If you do agree to a net wage, make sure you define it.
http://www.4nannytaxes.com/index.cfm/faq/nannyhousekeeper-faq-list/nanny-net-wage-agreement/
http://www.4nannytaxes.com/index.cfm/faq/nannyhousekeeper-faq-list/nanny-net-wage-agreement/
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