Becoming a new parent is an exciting time; however, the decision on whether or not a parent will stay home with the child, or pay for someone else to take care of him or her, can be difficult. One option that is appealing to many families is hiring a nanny. An in-home nanny can provide convenience and personalized care for parents and their child or children. When choosing this decision, it is important to look at the tax implications on hiring a nanny.
Susan Allen, in an article from the AICPA, discusses a few points that are important if a family choose to hire a nanny.
- Nannies are household employees
- Employers must pay employment taxes and manage other payroll responsibilities
- Employers need to consider benefits
While these points may make is seem more complicated if one so chooses an in-home nanny, rather than a daycare facility, Allen also offers points on how to allow the in-home nanny transition go smoothly.
- Find the perfect nanny
- Use an inexpensive payroll service to manage the administrative burdens
- Take advantage of the depedent care flexible spending account
- Let your nanny help with other household chores
To read the full referenced article, click here. For assistance in understanding your obligations in hiring a nanny, please contact Terry Maycroft at (231) 726-5825 or tmaycroft@brickleydelong.com
Brickley DeLong is a West Michigan Accounting Firm, offering personalized accounting services with offices in Muskegon, Hart, and Grand Rapids, Michigan.