Money Rules to Know if You Employ a Nanny

1. Money Rules to Know if You Employ a Nanny 1.Consider State and National Laws: You're going to need to brush up on any state and national laws impacting the hiring of caregivers. Generally, a nanny is considered a household employee, meaning you control the work she does and how she does it, according to the IRS. 2.Prepare for the Tax Consequences: First things first, you're going to need to apply for an employer identification number, or EIN, with the IRS. 3.Budget for Ancillary Costs: Hourly wages are just one aspect of your budget when hiring a nanny. Forde notes that she needs to account for the nanny eating breakfast and lunch at her home, potential costs for on-the-job travel and a year-end bonus, which can be a week's worth of salary. 4.Consider the Cost of Doing It Wrong: Now that you've read about the tax costs, insurance costs and payroll costs associated with employing a nanny, you may be tempted to simply pay in cash and avoid the whole rigmarole. Experts caution against this strategy. Source: money.usnews.com www.thebaddaddy.com