Nanny taxes are due with the family's personal income tax filing - April 15th this year. The Associated Press recently published this primer for families who employ household workers, consulting with HomeWork Solutions in the preparation of the article. 

Direct hiring of senior caregivers by families continues to increase, and families have questions about minimum wage, overtime and whether to pay the elder caregiver when they are sleeping. US News and World Report recently noted that "by a 9-to-1 ratio, people prefer to stay in their homes as they get older rather than moving into an institution." They often become household employers as they hire individual home-care workers to help them age in place.

There is good news for household employers who pay their nanny or senior caregiver "on the books."  These employers are often eligible for tax savings on their personal income tax returns.  And these tax savings often go a long way towards offsetting the household employer taxes they paid!

Federal legislators are scrambling to raise revenues and lower expenses to reduce deficits, and the Internal Revenue Service (IRS) is under considerable pressure to improve tax collections. Employment taxes, including the "nanny taxes", are estimated to be undercollected by $73 -78 Billion per year.

You are responsible to file and pay household employment taxes for all individuals to whom you paid $1800 or more last year in conjuction with your personal income tax return.

HomeWork Solutions has experienced a dramatic increase in the volume of calls from employers of undocumented household workers in the past weeks.  The extensive media coverage of Washington’s renewed, bipartisan commitment to implement comprehensive immigration reform - and create a path to citizenship for undocumented workers - raises questions for families employing undocumented domestic service workers.

The IRS reports that audits of tax returns with income over $200,000 increased by 13% in 2012 over the prior year. The Wall Street Journal's Market Watch recently published advice on 5 steps to take to avoid an IRS audit on your Federal income tax return.

You have a new baby in the house, you are not sleeping well, and you need to line up a great nanny before you return to work. Or mom is declining and you have to hire a senior caregiver to stay with her while you are working because she just is not safe alone any longer. Hiring caregivers, whether a nanny for your children or someone to care for your aging loved one, is a stressful experience.

This is a question that more and more household workers are asking as they face retirement.  For workers who have been paid “off the books” – and that includes a large percentage of household employees – there is no easy answer.

Nannies and senior caregivers are hired to help keep loved ones safe and well cared for. Recently a Texas nanny that the hiring family thought was well screened was arrested and charged with child endangerment after the mom returned home and found the nanny drunk and passed out and her 20 month old free to roam the home. Turns out the nanny has quite a history of prior offenses, none of which were found because of the type of 'background check' run. Stories like these make families wonder how they can better screen their caregivers.