When families begin considering in-home care—whether for a child or an aging loved one—questions about costs come up quickly. One of the most common: Are these expenses tax deductible? The answer is: sometimes, yes. But it depends on your situation and the type of care provided.
Topics: nanny, agency, senior, in-home care tax deduction, senior caregiver tax deduction, child and dependent care tax credit, nanny tax credit
Topics: agency, nanny agency FEIN, childcare agency tax ID, nanny agency invoice for taxes
Did you employ a nanny or other household worker in 2024 and pay them $2,700 or more in wages? If so, congratulations—you’re officially a household employer with tax filing obligations in the eyes of the IRS! That means you will need to report your employees’ wages and pay employment taxes when you file your federal income tax return.
Topics: agency, CPA, nanny taxes 2024, household employer tax forms
Babysitting is an essential service for parents who want to go on a date, attend a child-free event, or simply have some time to recharge. However, when tax season arrives, many caregivers wonder whether they need to pay taxes on those earnings. The answer depends on how much money changed hands and whether the temporary work meets the guidelines for self-employment.
Topics: household employee taxes, nanny, agency, nanny side jobs, babysitting taxes, babysitter self-employment tax
If you’ve hired a nanny, you’re responsible for handling their payroll and taxes correctly—and that includes issuing a W-2 at the end of the year. But a W-2 isn’t just a form you fill out in January; it’s the final step in a yearlong process of paying your nanny legally.
Topics: nanny w-2 form, nanny, agency, nanny tax withholding, How to create a W-2 for a nanny, Employer responsibilities for a nanny, Nanny tax forms
Surprisingly (or maybe not…), the Internal Revenue Code doesn’t provide a neat little list of exactly what can and can’t be deducted as a business expense. Instead, it gives us this broad guideline:
Topics: nanny taxes, household payroll, agency, CPA, business expense deductions, household employee tax rules, self-employed tax write-offs
Feeling like there’s never enough time in the day? You’re not alone. Between work, family, and everything else on your plate, managing your household’s payroll and taxes can feel overwhelming. But here’s the good news: you don’t have to do it all yourself.
Topics: household employee taxes, caregiver payroll, nanny, nanny payroll, nanny background screening, agency, senior, outsource household payroll, stress-free payroll solutions
Updated December 2024
Every year HomeWork Solutions prepares a summary of new or updated household employment tax laws and benefit information.
The IRS annually reviews, and adjusts as necessary, the wage payment threshold that obligates a family to pay Social Security and Medicare taxes. These tax withholdings are reported annually on a W-2. This threshold will increase to $2,800 for 2025.
Minimum wage will be increasing in many states and cities across the country. As longtime advocates for fair and legal pay, we believe this is long overdue! Domestic employees deserve a living wage that fairly compensates them for the invaluable work they do to keep our households running.
Topics: senior care, nanny, agency, senior, CPA
When new household employees reach out to HomeWork Solutions for information on how their employers should report wages, some respond with “I don’t want to pay taxes, maybe we will just do this under the table.” While under the table payments might seem tempting at first, it really isn’t a good idea to work “off the books." We remind these callers when unreported or under-reported income comes to light the taxpayer not only owes the original amount, but also penalties and interest. Often these callers ask how the IRS will find out about the payments. So, let’s look into how under the table wages may be discovered.
Topics: senior care, nanny, agency, senior, CPA
