Reply to live-in nanny payroll

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[quote=nannydebsays][quote=Anonymous]I think what OP means is that, as a live-in, the "value" of the room and board provided by your employer are taxable income according to the state and federal government and so they must be given a monetary number and reported as income by the employer and then the employee must pay taxes on that portion of "income" even though the employee gets it in trade, not in cash wages.  And she can't figure out how to decide on a number.

It's pretty arbitrary.  You can look at what you pay her as a live in and then what you WOULD pay her as a live out and call the difference the value of room and board.  That's probably the most accurate way.[/quote]

If the above is correct, I would strongly suggest that you value the room and board as low as possible so that your nanny doesn't get screwed over when it comes to her taxes. Maybe $200/month MAX.

I have never heard of room/board being taxable income for a LI, and unless you are in a situation (running for President one day or possibly being nominated to the Cabinet or the Supreme Court) that demands you be absolutely scrupulous about your household employee taxes, you might want to drop this idea. It's a guaranteed way to mess up your relationship with your LI nanny, IMO. Any time you increase an employee's tax burden without actually giving them more money in hand, you're going to sour that relationship.
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