In-home nannying is a blessing but figuring out nanny tax information can feel like a curse. Complying with different nanny taxes and employment laws is an important part of the process.
Nannying requires a strong sense of trust between employer and employee. Letting someone into your personal life as a professional can be difficult to navigate. Oftentimes, you won’t have a Human Resources office running interference in home care employer-employee relationships. Maintaining a strong relationship with your nanny requires consistency. You should clearly communicate and uphold your nanny’s pay structure.
Nanny Tax Information
Payroll for home care might look different based on your family’s unique pay structure and benefits package. Do you pay your nanny weekly, biweekly, or monthly? Depending on your pay schedule, you could suffer through figuring out four different payroll calculations per month.
Although AMS Payroll for home care will take care of the nitty-gritty, it would benefit you to learn a little bit about nanny payroll taxes. The IRS provides a helpful household employer’s tax guide. Your nanny is likely considered an employee, not an independent contractor. Just like tax responsibilities in other workplaces, you and your nanny will split the 15.3% FICA tax liability that funnels into Social Security, Medicaid, and Medicare. However, as a household employer, you have the choice to use Form 1040 Schedule H.
You’ll use Form 1040 Schedule H if you pay your nanny at least $2,300 in that tax year (this amount is subject to change, so make sure you know the threshold for each year), or cash wages totaling $1,000 or more in any three-month calendar quarter.
Once you figure out your household’s pay structure, you can implement AMS tax software to make the payroll process easier.
Advanced Micro Solutions (AMS)
The everyday chaos of keeping house can make it difficult to do manual payroll for home care without error. Nanny payroll software, and other software for home care, eliminates the need for you to spend hours figuring out nanny tax support on your own, and it significantly reduces opportunity for error.
AMS Payroll is a modular option for the 1099 Forms Filer. The software processes live and after-the-fact payroll, as well as direct deposit options. Enter the necessary data, and AMS Payroll for home care will automatically calculate federal, state, and local payroll taxes.
If you’re making the jump from manual payroll to a payroll software, first of all: Congratulations! Second of all, AMS Payroll imports data from QuickBooks, Excel, PeachTree, and Tab-Delimited Text Files.
The W-2/1099 Forms Filer is a strong foundation for any tax venture. AMS Payroll is just one of many modules you can add to this flexible software. Consider adding the E-Filer module if you would like the added ease of filing your tax forms directly to the IRS/SSA.
AMS Payroll software supports more than your household nanny. You can use this module for any household employee. AMS Payroll has the capacity to support federal payroll forms beyond 1040 Schedule H. See a full list here.