'Oh what a tangled web we weave when first we practice to deceive'
Topics: nanny payroll tax
Several months ago we blogged about the US Supreme Court's findings on the Defense of Marriage Act (DOMA) and how this impacts household employers or household employees in a valid same-sex marriage.
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.
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.
Did you know that every paycheck's net or take home calculation will change in 2013? Calculate your nanny paycheck deductions before you issue any 2013 payroll.
San Jose’s Measure D, which will increase the current city’s minimum wage from $8 to $10 per hour effective March 2013, passed with overwhelming voter support.
San Jose is now one of the two cities in California whose minimum wage has gone up independently of the state's. San Francisco has enforced its own minimum wage for many years. There are only a handful of other cities nationwide that set their own minimum wages: Washington, D.C., Santa Fe and Albuquerque, N.M.
Household employers in San Jose whose pay their employees minimum wage need to adjust their salary to reflect this new rate in March 2013.
Stay tuned for more updates from The Nanny Tax Experts.
IRS and states recently affected by Hurricane Sandy will extend tax deadlines and waive some penalties to tax payers affected by this natural disaster.
Tax Commissioner Craig M. Burns has announced that Virginia will provide a penalty waiver to those individuals and businesses affected by Hurricane Sandy. This penalty waiver applies to any late returns filed or payments made by affected taxpayers between October 29, 2012 and November 9, 2012. To notify the Department of Taxation that you were affected by Hurricane Sandy, you must write “Hurricane Sandy” at the top of your return. The Department of Taxation will then abate any late-filing or late-payment penalties that would otherwise apply.
To qualify for this penalty waiver, taxpayers must be unable to meet their filing obligations because the financial books and records they need to file their taxes are unavailable because of hurricane damage or power outage.