As a working mom, you’re probably juggling a lot right now. The start of the new calendar year is one of the busiest times at work. School is back on, along with all of the extracurricular activities and time-consuming homework. Its cold outside, the kids are bored… and if you didn’t have your nanny to help, you’re not sure how you would survive.
On top of it all, it's tax time. You read it right. You have limited time to deliver your nanny the W-2 form. January 31 is the deadline. You don't want to miss it!
The nanny tax - otherwise known as the "household employment tax" - is a requirement if you pay your nanny or other household employees like a housekeeper, babysitter (over 18 years old) or home health care aid over $1,000 per quarter, or $2,000 throughout the year.
What's new: the Social Security Administration announced that for new year (2016), the threshold has gone up from $1,900 to $2,000.
Always be aware that the dollar threshold applies separately to each domestic employee, and includes any bonuses paid.
Failure to pay the nanny tax can set you back with fines and penalties up to $25,000. Not to mention all of the stress of a time-consuming audit. In addition, being compliant helps your nanny become or stay eligible for Social Security and Medicare benefits upon retirement.
Here at SurePayroll, we created this new video outlining what you need to do to pay the required nanny taxes. Check it out for inspiration! Just think of how nice it will be to check this off your list so you can focus on all of the other important things going on in your life!