OP here.
We weren't paying her with taxes at first, since she was just helping us out until my mother took over when I went back to work. Then, that suddenly was no longer the plan and when I had to go back, we were stuck in a bind. We hastily made payment adjustments and once everything was discussed, we found a payroll company and made arrangements to go "legal."
She already does the laundry and light housekeeping (vacuums once a week, swiffers the kitchen floor, dishes, cleans up after the boys, organizes their toys and closet, etc.). As I said, she finds the kids to not be as exhausting as I do on the weekends and offered to do these chores (and more) since she started. They're just things she does. I don't think I'd get even half of what she gets done in a day if I was at home all day, every day. There's really nothing more we can ask of her. If she thought there was, she'd probably already be doing it (our boys take a 2-3 hour rest/nap still).
Thank you for your answers.
I think we definitely should look into the hourly pay.
Registration for preschool programs look like they start in January. At what time do you think we should start looking for another family to potentially nanny share with? Same time? The twins wouldn't be starting school until the school year starts in 2014.
[She doesn't work over time, btw. Her hours give me an extra 45 minutes to an hour with her after I get home, thankfully enough. And, my mom comes over a lot and if I know I'll be late, my husband is around or my mother will come over to help. Our nanny doesn't drive so she's free to go as soon as her ride arrives, as long as I'm home. She's "off the clock" come 5:30, whether her ride is here or not.]