If you employ someone in your home — such as a nanny, senior caregiver, or housekeeper — you may have heard about Schedule H and wondered how it fits into your tax return.

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In the modern economy, more and more households are hiring domestic help, whether it's a nanny, caregiver, or housekeeper. These household employees play a crucial role in keeping our lives running smoothly, and it's important to recognize their dedication and hard work. One effective way to show appreciation and also maximize tax savings for you, and your employee, is by offering a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or an Individual Coverage Health Reimbursement Arrangement (ICHRA).

Topics: nanny agencies, senior care, nanny, nanny tax, household payroll tax, nanny benefits, household independent contractor, household payroll, agency, senior, CPA

You’ve found a nanny to care for your children and now comes the conversation of payment and taxes. If your nanny doesn’t want you to report her wages or pay taxes, how should you respond? It may be convenient to pay your nanny under the table, but not only is this illegal, it could be very costly if you end up getting caught. Failure to pay nanny taxes could result in hefty penalties and fines, often in the thousands of dollars range.

Topics: nanny tax, household payroll tax

Despite the best efforts of Congress, the number of families that that fail to pay their nanny taxes each year is estimated to be 1.8 million. Aside from the fact that these families technically commit perjury on their family tax returns every year, they also deny their household employee (nanny, housekeeper, senior care nurse, etc.) of retirement and unemployment benefits. As if these weren’t reason enough, here is a list of five more important reasons why you should pay your nanny taxes (and some of them might surprise you!).

Topics: nanny taxes, household payroll tax

At Thanksgiving last year, The Crawford Family got together as so many families do on this day to share a traditional meal, spend time together and talk about where they are and where they want to go.

Topics: housekeeper, household payroll tax

HWS has been providing Nanny Tax compliance services since 1993. Did you know, in a recent client survey, the biggest motivation for employers in outsourcing nanny tax compliance is the time saved?

How much time an individual would spend on their nanny taxes will of course vary between individuals. The IRS estimates that record-keeping, keeping familiar with the law, and tax return completion can run 60 hours per year. Record-keeping accounts for the lions share of the time, an activity that needs to be done every payroll period.

I was chatting with a client today. This gentleman has used our services for many years, and his household circumstances are changing. In the course of the conversation, I asked him what factors caused him to continue using our services year after year. He answered without hesitation "The time savings!" He went on to state that he actually spends only about one hour a year on his nanny taxes - primarily in collecting his information and responding to our quarterly requests for wage reports. (This client is a NaniTax Plus subscriber.) He was certain that he had never filed a tax return on time before hiring HomeWork Solutions, and that the savings in late fees alone was more than our fee. I suspect some exaggeration, but not much!

Topics: nanny payroll, nanny tax, household payroll tax

Hiring a nanny to care for children, or a caregiver for an elderly family member can be very expensive. These employees often work long hours and your need for their services is generally perpetual. The high cost of employing household workers often makes it tempting for families not to report paid wages, since reporting carries additional financial requirements related to unemployment insurance and other benefits. However, the risks to families who do not pay their domestic employees "on the books" are considerable.

Topics: household employee taxes, household employee, household employer, household payroll tax, workers compensation household employees

Regardless of whether your household employee is full time or part time, employers are required to pay employment taxes if the employee is paid $1900 or more per year (in 2014).

Topics: household employee, household employer, nanny taxes, 1099 v w-2, household payroll tax, household payroll

The Department of Labor extended minimum wage and overtime rules to most home care workers who aid the elderly, and the media is running to provide perspective on caring for aging Americans.  The new rules, which go into effect Jan. 1, 2015, change how the companionship exemption to minimum wage and overtime under the Fair Labor Standards Act works.  Ashlea Ebeling of Forbes recently published a comprehensive article on this matter called, “Hiring Help For Aging Parents? Read This First. “ If you’re fortunate enough to have parents living into their golden years, there will inevitably come a time when you notice that everyday tasks become everyday obstacles, and getting reliable, affordable and caring help becomes the holy grail. 

Topics: elder care, senior caregivers, overtime rules, household payroll tax, hiring care for seniors

The Internal Revenue Service issued new 2014 income tax withholding schedules and they are fully integrated with our online tax calculator now. We are fielding a lot of inquiries about new paycheck amounts and will try to address the common questions here:

Topics: nanny, nanny tax, nanny taxes, household payroll tax