Although it is estimated that 80% to 90% of household employers are not tax compliant we highly recommend paying nannies legally. Yesterday, we listed the risks for parents that don't pay their nannies legally. Today, we are listing the benefits for household employees to be tax compliant. Click here for our review of the best tax software to use to complete your taxes.
The benefits for nannies that are paid on-the-books include:
A History of Salary and Employment: If you want to rent an apartment, lease or buy a car, apply for a credit card, or apply for a mortgage you need a record of employment to prove you make a salary.
Unemployment Benefits: If you lose your job through no fault of your own, you will be able to receive a portion of your salary if you are laid-off. This is an important benefit in a difficult economy.
Disability Benefits: If you have an illness or injury you can collect Disability Insurance while you are unable to work.
Workers Compensation: If you become sick or injured on the job Workers Compensation is an insurance plan to help pay for your medical care.
Social Security and Medicare: Once you meet a certain age requirement to retire the extra money can be a benefit. Medicare can help pay your medical expenses once you reach retirement age.