|By Marketwired .||
|March 20, 2014 06:00 AM EDT||
GLENVIEW, IL--(Marketwired - March 20, 2014) - Today, millions of Americans are scrambling to meet the personal income tax deadline of April 15 and in the rush, important items such as the household employment tax commonly referred to as the "nanny tax" may be overlooked.
The "nanny tax" is a requirement if you pay a nanny or other household employee such as a housekeeper, babysitter (over 18 years old) or dog walker over $1,000 per quarter, or $1,800 throughout 2013. The nanny tax can often be overlooked, as many parents are either unaware of the tax, or they may attempt to avoid it altogether to save money.
"Paying the nanny tax can seem daunting to parents, especially if they just hired a caregiver for the first time. There is a lot to remember, and parents already have a lot on their plates," said SurePayroll CEO and President Michael Alter. "Still parents need to understand that the repercussions for not paying the nanny tax can be far worse."
Failure to pay the nanny tax can set you back with fines and penalties up to $25,000, not to mention the stress of a time-consuming audit. In addition, paying the tax helps your nanny become or stay eligible for social security and Medicare benefits upon retirement.
A few things parents need to do to prepare for this tax include:
- Obtain an Employer Identification Number (EIN).
- Report your new hire to the state in which you reside.
- Research and understand your state employment and worker compensation laws.
- Determine your nanny's or household employee's withholdings.
- Calculate and withhold social security and Medicare taxes.
- Create a W-2 for your nanny, and file a schedule H (form 1040).
Parents who don't want to hassle with all the paperwork do have options to make nanny payroll easier. A payroll calculator can help -- parents will want to ensure it calculates appropriately for their state laws. In addition, affordable online payroll services such as such as SurePayroll (www.surepayroll.com), can do it all for parents, automatically handling all the withholding calculations, paying the nanny or household employee via direct deposit. Your nanny gets paid on time and the taxes are automatically deducted, filed and paid to the appropriate agencies. In addition, if you work with SurePayroll, you can produce signature-ready Schedule H and W-2s, sparing already busy parents from filling out and filing confusing tax forms.
SurePayroll is the trusted provider of easy online payroll services to small businesses nationwide. Whether a business has 1, 10, or 100 employees, SurePayroll delivers peace of mind by combining innovative, industry-leading technology and personalized support from an award-winning, U.S.-based customer care team. SurePayroll also provides private-label and co-branded services for accountants and banking partners as well as offering efficient online solutions for managing 401(k) plans, health insurance, workers' compensation, employee screening and more. SurePayroll is a wholly owned subsidiary of Paychex. For more information, please visit www.SurePayroll.com. Follow us on Twitter - Circle us on Google - Connect with us on LinkedIn - Like us on Facebook.
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small- to medium-sized businesses. The company offers comprehensive payroll services, including payroll processing, payroll tax administration, and employee pay services, including direct deposit, check signing, and Readychex®. Human resource services include 401(k) plan recordkeeping, section 125 plans, a professional employer organization, time and attendance solutions, and other administrative services for business. A variety of business insurance products, including group health and workers' compensation, are made available through Paychex Insurance Agency, Inc. Paychex was founded in 1971. With headquarters in Rochester, New York, the company has more than 100 offices serving approximately 570,000 payroll clients as of May 31, 2013. For more information about Paychex and our products, visit www.paychex.com.
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