February 8, 2006

Putting The Nanny On The Books

What with tax season and all, those parents who paid their caregivers more than $1,400 last year are looking at the withholding taxes their supposed to file and pay--and deciding whether they're gonna do it.

The BusinessWeek Working Parents blog [1] has a pretty straightforward checklist of steps, forms, and filings that you need to maintain your viability for future political appointments [2] by putting your nanny on the books.

In addition to those kitchen-table-level steps, I'd also point out that good old Quicken has extended line items that let you track payroll information and feed it into the required forms {Schedule H, etc.) on your federal/state tax filings.

The other major Intuit-related option is QuickPayroll, which used to be a module for Quicken, but is now a subscription payroll solution provider. For Quicken users, there's a basic payroll service for $11/mo (vs. $17 for the standard service), but it doesn't do state filings. For QuickBooks Online users, QuickPayroll is $15/mo. more. Depending on the size of your domestic staff, you might look into it. Check with your accountant to make sure, but such financial management and tax preparation software is usually a tax-deductible expense.

Those Darn Nanny Taxes [businessweek.com]

[1] I know, right? BW's Working Parents blog just launched a couple of weeks ago. It's written by a team of BW staff members in the demo [i.e., they all have children at home]. A little all over the map, content-wise, as they figure out how to manage the professional/confessional balance, but it's a welcome acknowledgement of a much-ignored, much-needed subject.
[2] Don't get me started. I laugh and long for the day when all the political corruption we had to worry about was whether some random judge paid her nanny tax.

4 Comments

Crap, there goes my political career! (HAH! Like I didn't piss that away last week! You think anyone actually reads the NY Times?)

Anyway, from now on, I would like to be known as the Zoe Baird of the blogosphere.

The people I nanny for won't claim me, even though I wish they would so I would have something to claim other than CBB!

First find out if your nanny files as an independent contractor or not. Many do, particularly if shared or if use an agency to get them bookings also.

[good point, It's good to be in sync. But to cover your own butt, also be sure to check whether your situation meets the IRS's definition for household employee or self-employed worker, which is on p.2 of pub. 926 (pdf). And of course, you'd still be on the hook to file 1099's for the money you pay out... -ed.]

Thanks for the link. Big fan of the blog.

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