If you are a CPA at this time of year, you are hoping and praying that your clients with nannies have their documents in order. Your fingers are crossed that your clients have tracked their nanny’s hours worked, paychecks paid, and all with their Social Security and Medicare taxes withheld. You really hope they have already done their quarterly unemployment tax filings and issued their nanny's W-2. Unfortunately, the odds are not in your favor. Most nanny employers either are not fully aware of the responsibilities of household employment or lack the time to handle these obligations, which leads to hours and hours of extra work on the part of you, their CPA.

Many families have a regular babysitter or nanny, or even a babysitter to help over school holidays. This extra set of hands caring for your children allows you to meet your obligations professionally and as a parent.  Do you pay your babysitter or in-home childcare provider cash, thinking this is just babysitting and never considering payroll taxes? Have you wondered if babysitter taxes even exist? They do – and if you fail to pay them and the IRS finds out, this could result in some hefty penalties or fines.

But, don’t panic right away.

If you pay your babysitter less than $2000 a year (2016), you will be exempt. But, if your babysitter is 18 or older and you end up paying more than that amount, the IRS will consider this a household employment situation and you will need to calculate babysitter taxes into your budget.

Nanny work agreements are an important part of the nanny-employee relationship. As an employer, the nanny work agreement establishes an overall framework for the nanny employment arrangement, as it will establish a professional relationship from the beginning. Here are some key reasons why we love nanny work agreements, and why you should too!

There are a lot of questions that surround taxes that families are required to pay for their nanny or senior caregiver and for most people, the process can be confusing and at times, overwhelming. Here, we answer some of the most commonly asked questions.

Q: Is there a dollar threshold at which W-2 Forms are not required?

A: Household employers are required to issue a W-2 when cash wages in the year reach $1,900 (2015), or if the household employer has withheld income or payroll taxes. When wages do not meet the threshold and taxes were not deducted, a W-2 is not required.

Winter weather is on its way and that means that nanny employers need to plan ahead and have an inclement weather policy in place. Traveling to work in snowy or icy conditions can be unsafe and safety should be a priority for both parties. In the event of a weather emergency, an inclement weather policy should be outlined and understood at the beginning of employment. Here are some tips on how to prepare for situations that may come up unexpectedly.

There are a lot of news stories about seniors being taken advantage of. Sometimes it is physical abuse that you hear about and other times there are reports of senior scams that drain bank accounts. Seniors everywhere are being used rather than cared for, so in order to keep your loved one from becoming a victim, quality background checks are needed for caregivers and household employers. The National Institute on Aging estimates that there are about 7 million Americans that are long-distance caregivers for their aging parents and for this reason, reputable caregivers are needed to help bridge the gap for those that cannot make it over daily to help take care of their loved ones. In addition, it’s estimated that the number of people age 65 and older will double by 2050, a phenomena often referred to as the silver tsunami. This means that more families are background screening senior caregivers. 

In 2015 many labor groups pushed hard for increases in the minimum wage. While they were unsuccessful at the federal level, many states and municipalities have minimum wage increases scheduled for January 1, 2016. Household employees such as nannies, housekeepers, and many senior caregivers are covered by minimum wage legislation, and when there is a difference between the state and federal rates, the greater of the two applies.