Remember, Well Beyond Care’s mission is to make things easier, save you money, and lower stress!!! And these tax issues are no different. We have laid out everything for you, including capturing your deductions for Local, State, and Federal Taxes. As a courtesy, we will generate a W-2 for each Caregiver (employee) you have hired, and with this information you can then generate your W-3 and Schedule H forms. Well Beyond Care has even partnered with The Nanny Tax Company to help with tax and filing issues at a member’s rate. Remember, we want to empower you with information and tools to help you find the ideal well-matched, dependable, reliable Caregiver, and at the same time save you between $200 to $575 per week in costs!!
We know for some people, this can be scary because it is an unknown, and we want to dispel those fears and make sure that you are being a great citizen by abiding by the law. While some of you may be able to file your own quarterly and yearly tax obligations, Well Beyond Care has partnered with The Nanny Tax Company to help those who need it. You may contact Laura Weiland, CEO at:
We have also generated a list of Tax and Employment Questions and Answers below for your edification and information. Just click on the link to open the Q&A item. As always, if you have any questions, you can contact your Nurse Care-Pair Manager.
(click on questions to view answers)
The employer contribution includes Social Security, Medicare, federal unemployment and state unemployment taxes. The employee withholding includes Social Security and Medicare and possibly federal, state and city income taxes. Well Beyond Care sets aside all of the withholdings that are necessary to be in compliance with Federal and State tax requirements to make it easy for you to print and prepare your own taxes, share the documents with your CPA or you can hire The Nanny Tax Company.
Yes, it is true, you might feel like NOT paying these taxes and might be thinking, “Why should I pay nanny taxes? No one else pays them and I’m not running for public office.” And you would be right, still there are three really good reasons why you should pay nanny taxes:
- It’s the right thing to do – not only are you protected if audited, but your employee benefits from having Social Security and Medicare taxes paid, as well being eligible for unemployment compensation if the Caregiver no longer works for you. Recording what a Caregiver makes insures they will have a record of what they have earned for the year which they will need when making a large purchase like a house or car or applying for college aid.
- You can SAVE money by paying nanny taxes. There are two strategies to reduce your nanny taxes: Flexible Spending Accounts and the Child and Dependent Care tax credit. See How can I save money by paying nanny taxes? (below) for more information.
- The IRS will catch you. If you do not report your household employee’s wages and pay the associated taxes and you are audited, you will be subject to penalties and interest. See Can the IRS catch me if I have not paid nanny taxes? (below) for more information.
- Federal nanny taxes (Social Security, Medicare, income taxes, and federal unemployment) are generally paid with your federal income taxes.
- State nanny taxes (unemployment and income taxes) are generally paid quarterly although some states have monthly or annual filing requirements.
- In addition, you must give your employee a W-2 by January 31 and file the W-2 and W-3 forms with the Social Security Administration by January 31, and Well Beyond Care will produce these forms for you.
- 4th Quarter State Unemployment Taxes
- 4th Quarter State Income Tax Withholding#
- W-2 to Employee
- W-2 and W-3 to Social Security Administration
- State Income Tax Reconciliation#
- Schedule H filed with Federal 1040 Return to reconcile federal nanny taxes
- 1st Quarter State Unemployment Taxes
- 1st Quarter State Income Tax Withholding#
- 2nd Quarter State Unemployment Taxes
- 2nd Quarter State Income Tax Withholding#
- 3rd Quarter State Unemployment Taxes
- 3rd Quarter State Income Tax Withholding#
* These dates apply to most household employers.
# These filings are not necessary if no income tax is being withheld
Since your employer (Careseeker} is not taking out any income taxes, you may be required to make quarterly estimated income tax payments. For more information about when, how, and where to submit these taxes, click here: Publication 505, Tax Withholding and Estimated Tax and look for the “Estimated Tax” link in the publication.
YES. There are several ways you can be “caught” by the IRS.
- If your employee files for unemployment benefits after their employment with you ends and you have not paid your State Unemployment Taxes, the State Unemployment Office will fine and penalize you, and report you to the IRS.
- f your employee becomes disabled, cannot work and files for social security disability benefits and you have not paid your employee’s Social Security and Medicare taxes, the Social Security Administration will impose back taxes, interest and penalties.
- If your employee files a tax return and includes the wages from your employment and you have not provided a W-2 to the employee, the IRS will fine and penalize you for the back taxes.
- If both parents work and your tax return does not include available tax credits, the IRS may become suspicious and audit your tax return.
- If your employee retires and applies for Social Security and Medicare benefits. If you have not paid your employee’s Social Security and Medicare taxes, the Social Security Administration will impose back taxes, interest and penalties.
There is no statute of limitations for failing to report and pay federal payroll taxes.
The Flexible Spending Account (FSA). You may be able to withhold pre-tax money from your paycheck in order to reimburse yourself for child and dependent care costs. With this option, you may reduce or completely offset your nanny tax costs! Check with your employer to see if they offer this benefit.
The Child and Dependent Care tax credit. This is a credit that can reduce your Federal Income Taxes but there are several tests you must pass in order to qualify for this credit.