I want you to meet Stephanie Breedlove, of Breedlove & Associates,
now part of the Care.com family. Stephanie and her husband founded this
household employment payroll & tax company out of a personal need (wanted
to pay nanny taxes) and honestly, I have never met a more engaging tax professional!
Here, she shares a real "nanny tax" story every family needs to hear.
During
this time of the year, my team hears from many families who have put off key
aspects of the household employment process. After being consumed with
finding and vetting the
ideal nanny, they begin paying her each payday – not
realizing there’s more to be done.
We
just handled a situation like this for a family in Minnesota. They hired a
nanny to care for their two young children last January. Exhausted from a
prolonged search and feeling the need to quickly re-focus on their careers, the
family hastily got their nanny situated with the kids and went back to work.
The
family paid the nanny an agreed-upon wage of $15 an hour for 38 hours per week
($570). They did not withhold any taxes from the nanny's pay
or pay any employer taxes. Fast forward to just a few weeks ago, they sat
down with their accountant and had to tell him they had paid $29,000 in wages
to their nanny during the 2012 tax year.
As
you might imagine, this meeting didn’t go very well. The family’s accountant
informed them that they had failed to withhold and pay the proper household
employment taxes.
So
he sent the family to my team at Breedlove & Associates and we were happy to
establish tax IDs for the family, file the overdue quarterly employment tax
returns, prepare and distribute a Form W-2 to the nanny, file Form W-2 Copy A
with the Social Security Administration and prepare a Schedule H for the family
to use with their joint tax return. Sounds
like a lot of work, but we do it all the time!
The
point of this story is to alert families that there are some employer
obligations. And, while we can certainly
help families play catch-up on their nanny taxes, it’s cheaper and easier to handle
them properly at the time of hire.
I
realize that nanny taxes are complicated. As a new mother trying to pay my first
household employee "on the books" more than two decades ago, my husband and I
learned that the hard way. That’s why we founded our specialty tax agency – to eliminate
the work and worry for busy families so they can spend more time with their
loved ones. We’ll be happy to assist
your family too. Please take advantage of the free nanny
tax resources at www.breedlove.com
or give us a call. We’re here to help!


