It may seem like summer just started, but back-to-school season is here and many parents are getting a head start on their nanny hiring process! Our tax experts want to arm you with all the information you’ll need to budget correctly and make the right tax and payroll decisions. Here’s what you need to know…
Are caregivers household employees… or independent contractors?
The first thing to understand is that the IRS considers nannies, senior caregivers, housekeepers, etc. to be employees of the families for whom they work. Some families make the mistake of misclassifying these workers as independent contractors (by providing them with a Form 1099 at the end of the year). This legal error can be very expensive for both parties – the employer is exposed to tax evasion charges and large IRS penalties while the employee has a higher tax rate and fewer benefits. Instead, families should report wages paid to their employee using Schedule H and provide her with Form W-2 at year-end.
Budgeting and tax breaks…
You may be wondering how much to budget for employer taxes. Here’s the good news…thanks to tax breaks, it’s probably much less than you think! The employer taxes fund benefits for the employee (i.e. Social Security, Medicare, Unemployment) and average about 10% of the gross wages.
Did you know that the childcare tax breaks can offset most of that 10% cost – some families even come out ahead! There are several factors that will affect your individual employer budget. Use our free Nanny Tax Calculator for a quick estimate. Most people are pleasantly surprised.
Gross wages vs. Net pay…
Gross wages refers to the amount paid to an employee before her taxes have been withheld. The government requires that all compensation be reported in terms of gross wages. Net pay (a.k.a. “take-home pay”) is the amount the employee gets each payday after taxes have been withheld. When discussing compensation with a prospective employee, we strongly encourage families to use gross wages. If you want to help an employee understand what her net pay will be, feel free to run scenarios with her using our Employee Paycheck Calculator or print out sample paystubs.
Don’t forget to tune into an informational webinar on household payroll and tax obligations on September 11th, at 8:00pm EST and 11:00pm EST. Learn more at myHomePay.com.
If you have questions, please don’t hesitate to give us a quick call at Toll Free 1-888-273-3356. We’re here to help!
Scarlet remembers her teenage babysitting years well. And now that she’s a parent, she’s realized just how much a sitter can offer her family. What does she really want? Someone who has so much fun playing with her kids.
Check out her post to read more.
What do you wish for in a great babysitter? Tell us!
Dana from KissMyList.com was a tidy child, a neat college student and a clutter-free adult. That is, until she had kids. (Sound familiar?) Now, with another spring cleaning adventure on the horizon, she wants a housekeeper more than anything.
Read her post to hear her interesting list of requests!
What do you dream of in a house cleaner? Tell us!
We are thrilled to announce an upcoming release featuring Facebook sharing, sticky posts more!
Here is what you need to know about each of our new features:
Part of a BigTent Group and a Facebook page? We are making it easier!
With Facebook sharing, you will be able to post group Events, News, and Classifieds to your Facebook walls, group page and more!
Sticky forum posts are finally here!
Groups now have a place to welcome new members, share forum guidelines, important announcements, and more.
Check out your BigTent Group to see all the new features.
Parenting is a rewarding, and yet undeniably stressful job. Renowned parenting blogger Christine has 6 tips–from delegating chores to evaluating busyness–to save you time and sanity. Wouldn’t it be nice to enjoy family life a little more this year?
Read her post in which she shares some secrets of how she makes being a mom of two so easy!
What ways do you make parenting easier? Tell us!
As most of you have already heard, Care.com and BigTent have joined families! We are excited to start sharing some of our great tips, tools and resources, as well as showcase all of the wonderful groups here on BigTent. Be sure to tell us what you think, what you want to read about, and reach out if you want to participate. We look forward to hearing from you!
For our first post, we’d like to share something a little more personal from the Care.com family. Our CEO, Sheila Marcelo, is from the Philippines and in the aftermath of the Typhoon Yolanda devastation, has been overwhelmed by numerous messages of concern and queries of how to aid the relief efforts.
Read her blog to hear her story and learn how you can help those affected by the disaster.
Do you employ a nanny, eldercare provider or other household help?
If so, you may not realize you’re entitled to certain tax breaks when paying your household employee legally, and your employee gains valuable protections and benefits.
Join us for a free webinar — “Household Tax Talk – What You Really Need to Know”– which will cover the basics of household payroll and tax requirements, plus dispel the most common household employment myths.
Household Tax Talk – What You Really Need to Know
Presenter: Stephanie Breedlove, Head of Care.com HomePaySM, Managed by Breedlove
Date and Time: Wednesday, September 25th at 1:00 PM EDT
In this webinar you will learn:
- The true cost of paying your employee legally
- A clear understanding of the law and the process
- How to avoid the most common pitfalls