![]() ![]() Tell your state you hired a new person.We agreed to do the standard deduction for my nanny and will not have to fill out. If they are not single or have more than zero allowances, they should fill out a state withholding form too.Assuming you want to withhold taxes instead of paying a lump sum to the government in April, ask them to fill out a W-4 and keep for your records.Form I9 will determine if an employee is legal and will need to be kept for your records should you ever have an audit. Your life will be much easier if you find someone who can legally work in the United States.You can look up your state here: State Revenue Site from the IRS. State tax systems are separate from federal government, so you will need to register your business twice-once for federal and once for state government. ![]() Get a State Employer identification number at your state’s website.You will need a new EIN for any changes in your business, not necessarily if you hire a different nanny. EIN is a unique number associated with your business for tax purposes. Get an Employer identification number (EIN), which is a nine-digit number issued by the IRS, and you must include your EIN on the forms you file for your household employee.As strange as it sounds, if you have a cleaning lady for $100 twice a month the IRS says very clearly that you should not just be using Venmo,” ~ White Coat Investor “ If you pay a domestic employee more than $2100 a year the IRS says you need to treat them like an employee, not a contractor. Independent contractors pay their own taxes and use a 1099 instead of a W-2. By contrast, Joe the yard guy, who supplies his own tools and equipment, is not a household employee but rather an independent contractor. This includes babysitters, cooks, drivers, maids, private nurses, senior caretakers or gardeners. ![]() I am referring to “nannies,” but a household employee is anyone you have hired to do household work, and you control what work they do and how they do it. I am excited to share what I have learned in the process, what you must do, and what NOT TO DO when hiring household employees. You could also consider hiring a personal accountant to set up account and spreadsheets for you for a one-time fee, and then run with it. Use a reliable one, and make sure they file electronically. Online companies cost around $800-$1200/year. Most people tend to outsource the payroll and withholding to another party like Nann圜hex, SurePayroll or HomeWork Solutions, however I opted to do it myself, because I am stubborn as heck, and I wanted to understand where my money is going. You will have much less headache If you plan to outsource payroll and withholding to another party or an accountant but comes with additional cost. I do not claim to be a personal accountant, and this is simply what I have learned. I recently went through this process and the rules and regulations are A LOT to take in, especially if you are like me and this is your first time working with household employees. By Chelsea Altinger Casey, MDĪ good nanny, or caretaker is a priceless addition to any household with young children and finding a good one is like looking for a needle in a haystack. It can be a headache finding the right person to look after your home and your children, but when you are lucky enough to find a keeper, you will need a financial plan – and hopefully not encounter another headache. ![]()
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