Get an Employer identification number (EIN), which is a nine-digit number issued by the IRS, and you must include your EIN on the forms you file for your household employee.As strange as it sounds, if you have a cleaning lady for $100 twice a month the IRS says very clearly that you should not just be using Venmo,” ~ White Coat Investor “ If you pay a domestic employee more than $2100 a year the IRS says you need to treat them like an employee, not a contractor. Independent contractors pay their own taxes and use a 1099 instead of a W-2. By contrast, Joe the yard guy, who supplies his own tools and equipment, is not a household employee but rather an independent contractor. This includes babysitters, cooks, drivers, maids, private nurses, senior caretakers or gardeners. I am referring to “nannies,” but a household employee is anyone you have hired to do household work, and you control what work they do and how they do it. I am excited to share what I have learned in the process, what you must do, and what NOT TO DO when hiring household employees. You could also consider hiring a personal accountant to set up account and spreadsheets for you for a one-time fee, and then run with it. Use a reliable one, and make sure they file electronically. Online companies cost around $800-$1200/year. Most people tend to outsource the payroll and withholding to another party like Nann圜hex, SurePayroll or HomeWork Solutions, however I opted to do it myself, because I am stubborn as heck, and I wanted to understand where my money is going. ![]() You will have much less headache If you plan to outsource payroll and withholding to another party or an accountant but comes with additional cost. ![]() I do not claim to be a personal accountant, and this is simply what I have learned. I recently went through this process and the rules and regulations are A LOT to take in, especially if you are like me and this is your first time working with household employees. By Chelsea Altinger Casey, MDĪ good nanny, or caretaker is a priceless addition to any household with young children and finding a good one is like looking for a needle in a haystack. With Poppins Payroll services, you will rest assured have absolute peace of mind as the year draws to a close.It can be a headache finding the right person to look after your home and your children, but when you are lucky enough to find a keeper, you will need a financial plan – and hopefully not encounter another headache. Taking care of nanny tax and payroll is a daunting task especially if you have no idea about bookkeeping.
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