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.
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.
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.
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.
Topics: filing taxes, nanny, nanny tax, Senior Caregiver Payroll, agency, senior, CPA
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.
Along with tax rate reductions and a new deduction for pass-through qualified business income, the new tax law also brings reduction or elimination to some popular business deductions. Two expense areas where the Tax Cuts and Jobs Act (TCJA) changes the rules — and not to businesses’ benefit — are meals/entertainment and transportation. In effect, the reduced tax benefits will mean these expenses are more costly to a business’s bottom line.
At the Federal level, private employers are not required to offer sick leave - whether paid or unpaid - to their employees. Most household employers voluntarily offer some paid time off to their nanny, senior caregiver or housekeeper in their work agreement.
Topics: senior care, nanny, agency, CPA
California has some of the most complex household employment labor laws in the country! So complicated in fact that the California Household Employers Guide, published by the state, runs 70 pages of explanation, and that is just for the taxation component!