{"id":49,"date":"2024-12-31T16:00:00","date_gmt":"2024-12-31T16:00:00","guid":{"rendered":"https:\/\/s37407.p1377.sites.pressdns.com\/homepay\/how-to-start-paying-your-caregiver-on-the-books\/"},"modified":"2025-02-12T21:12:02","modified_gmt":"2025-02-12T21:12:02","slug":"how-to-start-paying-your-caregiver-on-the-books","status":"publish","type":"post","link":"https:\/\/www.care.com\/hp\/how-to-start-paying-your-caregiver-on-the-books\/","title":{"rendered":"How to start paying your nanny or caregiver on the books"},"content":{"rendered":"

When families hire a household worker, such as a nanny or senior caregiver, they often don’t realize that paying taxes are part of their responsibilities as an employer. If you are one of these folks who was not aware of tax and payroll laws<\/a> — or even if you were aware, but now realize the benefits of paying on the books<\/a> — don’t worry: We’ll explain the six steps to transition from paying under the table to on the books.<\/p>

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1. Start calculating taxes owed from Day 1<\/strong><\/h2>

Because the IRS says you need to account for your caregiver’s taxes from the first dollar they earn, you’ll need to go back to their official start date. Whether that’s three weeks, five months or even two years ago, begin planning on how you will cover the taxes you’ve missed. You can use our paycheck calculator<\/a> to plug in what you paid your caregiver (the net pay) and see what the taxes should be for that amount. Going back in time requires a little more work, but not doing so leaves you at a higher risk if you’re ever audited by the IRS.<\/p>

“You never know when the IRS could ask to scrutinize your tax returns,” says Tom Breedlove, Sr. Director of Care.com HomePay<\/a>. “And if for some reason your caregiver were ever to file a wage dispute — whether legitimate or not — it could uncover your failure to pay employment taxes.”<\/p>

Keep in mind that if you’re going back to previous years to account for taxes, both you and your caregiver will need to amend your personal income tax return<\/a> for those years to account for the changes.<\/p>

2. Decide how taxes will be covered<\/strong><\/h2>

Since taxes weren’t withheld from your caregiver, they need to be paid. Some families ask their employees to pay a portion of the amount owed while other families might decide to absorb the cost of the back taxes completely. Whatever decision is made, make sure your caregiver understands that you’re using the money to pay taxes on their behalf and, that going forward, they will see the money come out of their paycheck.<\/p>

3. Talk to your nanny or caregiver about how taxes and payroll work<\/strong><\/h2>

If your nanny or caregiver isn’t used to having taxes taken out of their paycheck, you should talk about what future paychecks will look like. Use our tax calculator<\/a> to show them the exact breakdown and explain that their pay also factors in several important benefits. If they ever need to file for unemployment or hope to receive Social Security, being paid on the books gives them a way to access these benefits.<\/p>

Read more:<\/strong><\/p>

Do you need to pay taxes for your part-time caregiver?<\/a><\/blockquote>