small business articles

Taxes on Individuals & Families

Nanny Tax


Did you hire a handyman, housekeepr, gardner or nanny or some other individual to work for you this year?  If these individuals don't do work for other people and you paid them more than $1,800 in 2013, you may have a payroll tax obligation.  This tax obligation is commonly called the nanny tax.


Every few years the "nanny tax" becomes a big news story when some high-profile political figure reveals that he or she hasn't paid required nanny taxes. While you may not plan on running for political office, failing to pay the nanny tax on the household workers you employ could result in IRS penalty and interest charges. And that's in addition to the tax itself.

You are generally required to pay social security taxes on your worker's behalf, and you may have other federal and state payroll tax obligations as well.  January 31, 2014, is the deadline for sending W-2 forms to your workers if the nanny tax applies for 2013.  In 2014, the nanny tax threshold increases from $1,800 to $1,900. 

If you had household workers in 2013, it's worth contacting our office to discuss your tax obligations.


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By Dugan Lopatka - Accountants for Midsize Businesses in Chicago:  CPAs for Small Businesses

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