Wednesday, April 14, 2010

What if the Parents Don't Want to Pay My Nanny Taxes?

April 15 is Tax Day

In a monthly poll about nanny taxes Be the Best Nanny Newsletter conducted in April, 2006 the most common reasons parents gave for not paying their employee's nanny taxes were that there was too much paperwork, it's too confusing, and costs too much.

That is why we suggest the nanny purchase inexpensive nanny tax software (available all over the Internet) herself and give it to her employer. The software is not only inexpensive but eliminates both the confusion and paperwork.

Next, make the following points to your employer:

1. It's the law. Your employer is breaking the law by not being tax compliant. Doctors, attorneys, and accountants can lose their practices and licences if they do not pay their nanny on-the-books.

2. Tell your employer that you want to apply for a credit card, buy or lease a car, rent an apartment, or get a mortgage on a house. To do so you must prove you are working. You must pay taxes to prove you work.

3. You must be paid on-the-books to receive social security, unemployment insurance coverage, and an Earned Income Credit.

4. Paying taxes protects the parents in case you ever get hurt on the job. You must be paid legally to be eligible for Medicare benefits, disability benefits, or workers' compensation.

5. If your employer pays you legally they will be able to take advantage of their flexible-spending plan and deduct your salary as a qualifying expense.

6. Your employer has to report your wages and the taxes they withhold for you on their personal income tax return or be liable for hefty penalties.

7. The only difference between working as a legal American citizen rather than an illegal immigrant is that American tax payers are protected by the system with Social Security, unemployment benefits, Medicare, disability, and workers compensation.

8. Feel free to ask your nanny agency staff or any nanny tax company employee to talk with your employer about both the risks of not paying their employee legally and the benefits of tax compliance.


Anonymous said...

Thank you for posting this. If nannies ask their employers will do it.

Some of yesterdays comments are so upsetting to me. I cannot understand why Americans would chose to be illegal and not have the benefits they deserve.

I feel if you want to pay taxes then parents certainly must do so. If you ask they will do so. The idea of purchasing the software for your employer is a great idea too.

Maria Lopez Miami FL

Tobago Nanny said...

If the parents don't want to pay your taxes don't work for them. They don't lose any money it's your salary the money comes out of. If they cheat the government they will cheat you!

Anonymous said...

For anyone to say they cannot understand why people would want to do things illegally is naive. There are so many government programs available they outweigh any benefits from being paid legally. Keeping your whole paycheck tax free is just a bonus. Almost every year the government raises taxes and increases the benefits for the truly poor. Our good intentions are starting to make it more advantageous to cheat than pay taxes.

Anonymous said...

Yes and what happens when the government runs out of the money to pay for these programs. Or when some politicians are voted in or out of office and these programs get eliminated. This is happening in some states already.

And it is ridiculous to make the claim that the government is raising taxes when there are reports of the contrary out there all the time.

Taxes are what pays for your schools, your roads, your community services. And f the money isn't there, the program is lost.

I personally don't care to be footing the bill for other people. But to have the right to complain, I will pay my taxes as a citizen of this country.

Anonymous said...

If they don't want to pay your taxes then don't work for them. It is your right as an American to protect yourself with unemployment insurance and disability benefits. The only difference between an illegal immigrant that works as a nanny and an American working as an American is the citizen is entitled to Medicare, Social Security, unemployment & disability. Protect yourself and get paid legally like you deserve.