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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Shady that your agency would suggest you give your nanny an untaxed lump sum (which is illegal).

We are increasing this year $2/hr (from $28 to $30).

We do offer a monthly health insurance stipend which is tax free for us and our nanny.[/quote]

Not illegal at all, it’s a bonus and not taxable. We usually give our nanny about 2k at the end of the year and Nordstrom gift card. [/quote]

Ooh, very wrong. If this were true you could just pay minimum wage and give employees a $50k cash bonus at the end of the year. Just because some or even many people do it doesn’t make it legal.
Payroll services actually often withhold taxes at a higher rate than salary to be conservative, because of the uncertain implications bonuses and discretionary payments have on the final tax bracket at year-end.[/quote]

Any person can gift any other person up to $16,000  as a gift each year and it's not taxable.[/quote]

https://www.cpa-wfy.com/giving-gifts-to-employees-irs-wants-its-share/
Gift tax exemption only applies for personal gifts, not employer-employee gifts.

[quote]Decades ago, in a landmark case, the U.S. Supreme Court established that a transfer only constitutes a tax-free gift if it is made through “detached and disinterested generosity” or “out of affection, respect, admiration, charity or like impulses.” (Duberstein, 363 U.S. 278, 1960)
[/quote]

As I said, I know plenty of people just do a cash bonus (and many people just pay the whole salary as cash under the table too), because the IRS is not likely to hunt a UMC household down for that kind of stuff unless there's some other reason they're investigating you. But I would say this is along the lines of restaurants that don't report all cash earnings or people who don't report all cash tips as supplemental wages -- common, but not actually legal.[/quote]

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