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Before Hiring a Nanny, Think About Payroll


Hiring a nanny requires scores of critical considerations from the very safety of your children to whether the person will be a good personality fit for your family.

What's sometimes overlooked is that you have to also be aware of the rules and laws that apply to hiring a nanny.

While the federal government has a low threshold of taxation for nanny services that excuse — ignorance of the law — won't get you far when the Internal Revenue Service comes knocking.

There is an easy way to avoid staying on top of all the regulations. SurePayroll offers a simple and convenient way to manage your nanny payroll taxes automatically.

Put simply, you probably owe the nanny tax if you paid your nanny more than $2,000 a year or more than $1,000 in any quarter. The requirement does not apply if the nanny is a spouse, parent, child under 21, or anyone else under 18.

After hiring a nanny, you must be concerned with making sure the nanny is eligible to work for you, and you must apply for a Federal Employer Identification Number or EIN. You will also need to contact your state government for a state EIN. For a more comprehensive look at the nanny hiring process, see this article.

When it comes to the aspect of managing nanny payroll, you want the peace of mind of an online payroll service.

Keep in mind that there are few other options as reasonable and demystifying as an online payroll service when it comes to nanny payroll management. Many couples who employ a nanny do their own taxes or do not want to significantly ramp up their tax preparation fees for a service that can be handled independently and professionally online. The 24/7 availability to the service is an added bonus.

Regardless of the decision, careful consideration should be given because the IRS can levy fines up to $25,000 for failing to pay the nanny tax.