Must Be Paid On-The-Books to Collect Unemployment or Disability BenefitsTomorrow is tax day! Being paid-on-the-books is the best way to protect yourself in case you are laid-off or get sick. If you are one of the 70% to 80% estimated domestic employees that are not tax compliant (according to IRS estimates) there is no better time to bring up the topic with your employer's while taxes are on their mind.
Last tax season there were dozens of articles discussing that when the economy is bad nannies are the first to be laid-off. For example, "Nannies No Longer Rule the Roost," "Recession Shakes Up the Nanny Business," and "Feeling the Pinch."
In February, 2010 the Bureau of Labor Statistics estimated that 14.9 million Americans were unemployed.
In the current economy do you know what will happen to your job if your employers suddenly lose their jobs? If you are unexpectedly laid-off the only way you can receive unemployment benefits is if you have been tax compliant.
It is the responsibility of the nanny to ensure her tax paperwork is filled out and submitted as required by law. Many nannies incorrectly assume it is only the parents responsibility to be tax compliant. It is the nanny’s responsibility to ensure her wages are being submitted.
Also, many nannies and parents incorrectly assume that process of paying and submitting wages and taxes is difficult. Submitting taxes may sound confusing but it could not be simpler than using nanny tax software available to purchase online.
Each tax season I recommend that professional household employees purchase the nanny tax software themselves and give it to their employers. It is inexpensive and the software makes the process of submitting taxes simple.
No more excuses! This year buy some inexpensive tax payroll software which makes it easy to get paid legally and receive the tax benefits that you, and all hard-working American’s, deserve!
Are you paid on-the-books? If not, why?
I have collected both disability and unemployment in the past. Mistake I allowed to happen was the parents didn't record ALL of my income. We said I made $500 week when I made almost double. So when I was sick for 6 months I did not receive my whole benefits. I had to move back in with my parents since I didn't make enough to pay rent with benefits.
ReplyDeleteI would suggest submitting 100% of what you make with overtime and weekends and bonuses as gifts of cash only. Otherwise you probably won't get enough in benefits if you don't tell the truth.
I don't submit taxes because I was taxed 33% on my salary. Nannies that make less than me were taking home more than me. I am married and my husband pays plenty in taxes. If I am disabled or laid off my husband can still pay the mortgage. I have a IRA retirement fund. For single ladies paying taxes is more important because if they get sick or hurt they will need the diability benefits and social security.
ReplyDeleteI think it's just really hard to justify that I am in a higher tax bracket and other nannies making so much less take home so much more when I was submitting taxes.
Plus, it's a huge hassle. I heard the IRS does not aduit domestic workers so why bother unless you are single?
I'll tell you why I asked my current job not to pay taxes: I deserve the money I make. Like someone mentioned above it's hard to see other nannies bring home more than me even though they make less. One third of my salary was going to taxes at my last nanny job.
ReplyDeleteI understand the argument for single nannies too. But I just can't justify giving a third of my salary to a system doesn't benefit me (I have no kids, no house, and so on). Seeing how much money friends were taking home as nannies I want the same. I don't think anyone is dumb enough to leave their name when not paying taxes so I won't either.
Rather than not paying taxes completely I see why MOST nannies want to underreport and who can blame them? They probably work for families who don't pay their medical expenses, plus they have no safety net to fall back on. So, I think it is fine and helpful to underreport becaue most people do it. You both need to agree upon what to report and know consequences of underreporting (won't have as much from unemployment or disability if you file for them. Won't have as much in social security and medicare). But I don't think IRS audits domestics because they are just so thrilled if you are a domestic and file at all!
ReplyDeleteI am stunned that professional nannies that subscribe to this professional trade publication would even sugget not being paid legally. What about following the law? I get a statement every fall stating what I have paid toward SocialSecurity for my retirement. State and local taxes go to the schools my charges attend, for services that I use, and fund things like the military and FEMA to help rebuild after disasters. I am so much better off than women in other countries that I am willing to pay my part to support the country that allows me the
ReplyDeletelife I live.
If your employers are willing to cheat the government then don’t even pretend that they would never cheat you!!
I too am shocked to hear the first few responses. I know it stinks to pay taxes but if you are a responsbile adult- that is what you do. I am thankful I did not listen to some families, and nanny placement agencies that told me- "If you get paid off the books you will earn more!"
ReplyDeleteWell maybe for the time being..
but what happens if I become unemployed? disabled? need to show proof of income?
If you never pay in- you can never get back. I've been on UE- 3 times and it's been a life saver. I am married- but if we only had one income to rely on- we'd fall far behind quickly.
For families that find nannies who want to be paid off the books-
I'd take a close look to find out what they were trying to hide. Also if you don't pay on the books- what personal info. do you have on the nanny to track her down if something happens?
Families get tax breaks for paying on the books- and it evens out in the end. Nannies can collect UE and disablity and hopefully SS if/when their job ends.
Nannies won't be seen a professionals if they are paid off the books- and the nannies that choose to do this are only thinking of the present- and IMO..are the ones who aid in bringing down the nanny profession.
~Andrea, Professional Career Nanny
Northern, NJ
Taxes are too much paperwork and too much money to pay on top of a salary. Wouldn’t you rather take that money home? Everyone in any occupation wants to take home more money and pay less taxes!
ReplyDeleteI understand it is hard to deduct any money but look at the big picture. What if you get laid off? What if you get sick? What if you need proof of credit to rent an apartment or buy a home?
ReplyDeleteWhat differentiates an American citizen from an illegal alien is that a citizen can work legally in America.
ReplyDeleteIf you don't pay taxes then you are illegal and have none of the benefits of being an American citizen.
Nanny Reyna NY NY