Disclaimer: HomeWork Solutions employees are experts in Employment Taxes, not personal income taxes. That said, we see these forms every day. If you have specific questions please see your personal tax accountant for more 2018 W-4 help.

First off, here is a link to the IRS maintained version of the Form W-4.

This new version has substantial changes. Even some elements that haven’t changed have been rearranged on the new 2018 federal W-4 form. Starting from the top we do see some familiar things (provided you’ve read the “fine print” of the form before). The general instructions haven’t changed much but there are some clarifications about the adjusted child care tax credit as well as credits for other dependents. You’ll notice then that the bottom third of the first page is now the Employee Withholding Allowance Certificate with no allowance worksheet above it. The section is still the same with name, address, social security number, etc. The most important things here are filing status (box 3) and number of allowances (box 5), the same as it has always been. The major difference is that getting to your number of allowances is considerably more difficult.

All employees, including household employees, use the Form W-4 to direct the employer on how to calculate Federal income tax deductions from their paycheck. The responsibility for the accuracy of this form rests with the nanny or other employee.

Individuals can deduct some vehicle-related expenses in certain circumstances. Rather than keeping track of the actual costs, you can use a standard mileage rate to compute your deductions. For 2017, you might be able to deduct miles driven for business, medical, moving and charitable purposes. There are significant changes to some of these deductions under the Tax Cuts and Jobs Act (TCJA), so we've outlined the most important things you need to know in claiming mileage on taxes in 2018.

Once you’ve found the right person to serve as a nanny or caregiver in your home, you’ll be able to rest easy knowing that your loved one is in good hands while you’re away. Once you’ve hired your caregiver or nanny, you’ll discuss what hours they will need to work, but if you’re planning on "banking hours", or carrying their hours over, be aware that this process is illegal. Federal law requires that your household employee is paid for each hour they work in a given workweek.  If they work more than 40 hours in any given 7 day workweek, you must pay them overtime, likely at a rate of at least 1.5 times their regular rate. Some states even mandate daily overtime, so be sure you know the overtime rules in your state.

Travel nannies and newborn care specialists typically work in multiple states - and even countries - in the course of a year. A travel nanny is engaged by a family to provide childcare when the family is traveling to resorts, on a cruise, or just out of town a week or more on business. When it comes time to file and pay income taxes, multiple questions arise.

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. Adding to the complexity, there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act (TCJA) has temporarily reduced the threshold.

Many of our partners take advantage of working from their homes. It makes a lot of sense for convenience and cost. But just because you have a home office space doesn’t mean you can deduct expenses associated with it. For 2018, even fewer taxpayers will be eligible for a home office deduction.

Tax credits reduce tax liability dollar-for-dollar, potentially making them more valuable than deductions, which reduce only the amount of income subject to tax. Maximizing available credits is especially important now that the Tax Cuts and Jobs Act has reduced or eliminated some tax breaks for businesses. Two still-available tax credits are especially for small businesses that provide certain employee benefits.

Our client, John M. came to us after working with a nanny that he thought could work as an independent contractor.