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Do you find the Nanny Taxes confusing?

Posted by Vanessa Vidal, FPC on 11/9/13 11:00 PM

HWS CoBrand HiRes IconHiring a nanny or a housekeeper to help you out at home, a personal assistant to keep you organized, a senior caregiver to help you out with your aging parents, a gardener, cook or any other household worker to whom you pay directly (more than $1800 in calendar year 2013, $1900 in calendar year 2014) and you control the way the work is done and how, makes you a household employer!

According to the IRS's Publication 926 household employers who pay a worker more than $1800 cash wages in a calendar year, are required to file payroll taxes. 

Payroll tax obligations may include:

  • Social Security & Medicare Taxes (7.65% of Gross Wages) [FICA taxes]
  • Federal Unemployment Tax (FUTA) (0.6% of the first $7000 Gross Wages per employee)
  • State unemployment and disability insurance taxes levied on the employer.

Be informed.  Misclassifying an employee with an "Independent Contractor" and issue a Form 1099 vs. a W-2 is a very common mistake and carries costly risks to both the household employer and to the worker herself.  Learn more about distinguishing a household employee from an independent contractor here.



Receive Guide: Avoid Common  Nanny Payroll Mistakes

Topics: worker misclassification independent contractor, 1099 v w-2

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