As we wave good-bye to 2011, it's time to tidy up any loose ends on taxes.  If you hired someone to work in your home (i.e. nanny, nurse, housekeeper, chef, personal assistant, etc.) and paid them $1,700 or more, you have household employment tax obligations (a.k.a. "nanny taxes").  See Compliance Checklist for details.  Taking care of the reporting requirements has several benefits:

1) AUDIT & LAWSUIT PREVENTION.  Families who pay legally don't have to worry about audits, tax evasion charges or legal disputes levied by disgruntled former employees. Think of it as insurance against tax and legal problems.

2) TAX BREAKS. There is a common misperception that “nanny tax” compliance will be prohibitively expensive. The truth is most families with childcare expenses qualify for tax breaks that largely offset – sometimes even exceed – the employer tax costs. (See “Dependent Care Tax Breaks” for more details or visit our Employer Budget Calculator to get an estimate of your tax breaks).

3. PROFESSIONAL BENEFITS. When a family pays legally, the employee receives important short-term and long-term benefits, such as social security, medicare, unemployment, and an ability to obtain loans/credit. These benefits and protections have a dramatic impact on the perceived professionalism of the position and, therefore, the quality and duration of the employment relationship.

If you'd like to learn more about the Breedlove No-Work, No-Worry way to handle your obligations, watch this brief video or give us a call.  We're here to help.