The Nanny Tax Nightmare

What makes a nanny an independant contractor? It is actually a profession, so it should have the same regulations as any other. You hire a gardener, plumber, electrician to do work in your home.You pay his rate, he has to deal with his payments. You are not responsible if they fail to complete their end. The "right thing" is decent wages.

is that what "doing the right thing" is,having a stranger raise your kid for you? i suggest you do the raising and maybe just maybe you're kid will grow up to love you instead of the nanny?

This article is not about people not wanting to raise their own children. This article is about simplifying the tax cides so that one does not have to have a PH.D to pay taxes. Every time you mess up, you are made to feel like a criminal. Most people want to do the right thing.

I have never heard of the nanny tax and quite frankly, am very appalled. Its ludacris for the families who barely make ends meet. let alone pay for nanny taxes.

Ever heard of the nanny being the one to pay the family's taxes? I worked for a VERY wealthy family in the oil business. They never had time to devote to my position-not the taxes they owed on me or simple and beneficial instructions about their children. When I went to file taxes, which they told me I needed to do on my own, I realized that I was then considered a contract employee, the same as their plumber who came to their house maybe once a year. I worked full time for them and almost a half of my paycheck went to taxes. I also was required to use my own credit card for their children's purchases, and incidentals. I was not always reumbursed on time, and when I quit not at all. So doing something about these laws would also be hugely beneficial to a nanny who does not understand labor laws, and actually protect a specialized sect of the workforce who are by and large taken advantage of. The year I was a nanny, I earned poverty wages. I did end up calling the Colorado Labor Board, who wanted to go after this family immediately, but I was so under the spell of not wishing to tarnish their reputation (they are big benefactors to certain charities) or hurt their daughter's feelings, I did nothing. How stupid! -Denver, Colorado

Thank you so much for raising this issue. All the studies show that a loving relationship with a stable caregiver is best for children. And yet the taxes and paperwork make this option impossible -- that is, if you actually follow the law. Please, Congress, fix this problem. The law as it stands now is bad for children, bad for families and bad for our country.

Fairtax.

Funny that the liberal elite that pushes taxes down our throats to fund their charities and put their names on it like the Pell Grant, then go on to fight those who want to simplify the tax code, now whine like irresposible babies. Grow-up and face it tax and spenders, simplify the tax code and stop wanting to take a cut of eveything.

Actually, you seem to understand how to figure and pay the Federal taxes, and they are straight forward. Your difficulty seems to be the State unemployment. As to the issue of tax advisers and accountants, just get a competent one. It seems that competency on the part of your "nanny" was no problem, so if you are capable of finding a capable nanny, you should also be capable of finding a capable tax adviser. Quit blowing the problem out of proportion

How does this differ from the rest of us who employ several people ? I ran a small bussiness for 40 years and paid these taxes for 2-3 employes all those ;years . You need to become responsible rather than like those that hire illegals or pay cash to avoid these taxes. Sorry but living in America is not free!

How does this differ from all the rest so us small bussiness men and women that employ a few people? I paid these taxes for 35 years for my 2-3 employes and think everyone else should also rather than hiring illegals or paying cash to skip these taxes! Sorry , but you need to become responsible and make good choices.

All questions regarding child care should be directed to Iraqi Immigrant Nayda Suleman............after all she must have it all figured out before having 14 children!

Social responsibility is such a drag. Oh poor me.
The nanny doesn't want to pay her share of social security. Oh poor me.
If I don't pay it for her, she won't get social security later, and I'll feel guilty. Oh poor me.
I'm having trouble with high school math. Oh poor me.

Gimme a break.

that's what being an emoloyer is all about, taking care of childern is a responabily and a lot of work, not like sit down job ansering the phone and drinking coke's all day, if you don't want to pay someone the do your work for you get of your butt and do it yourself!

Those particular tax laws were written by politicians whose motives were completely corrupt. And to dutifully comply with corrupt laws is simply a case of agreeing to be a damn fool. And it's nobody's "responsibility," to be a damn fool.

Remember: it's not the parents paying the taxes, they submit the forms. Parent employers with hold the amount from the employee's paycheck (just like everyone else does). It's the nanny taking home less money, not the parents.

But, like the author explains unless (or until) laws are changed nannies are employed by parents and are their employees because they perform services for the parents. The IRS defines the difference between employee or independent contractor.

Here's the IRS link of definitions: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

"Employee: Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed."

Independent Contractor: People such as lawyers, contractors, subcontractors and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. However, whether such people are employees or independent contractors depends on the facts in each case."

Nannies are supplying the services for the family they are hired by, in their homes, for their children, doing the chores determined by the employers (parents).

Unless or until the definitions change then that's how it is determined and why most in-home child care providers must pay taxes. So since it's the law, I really think nannies can just purchase the software and give it to the parents. Otherwise aprents can go to H&R Block to ensure they follow the tax laws.