Do you depend on a babysitter or nanny to help you out with your kids? If the answer is yes, you may be wondering if your babysitter needs to be paying taxes on that check. There are several factors that play a role in this question and Mark Dicus & Company is here to help you sort them all out. We will explain what tax implications may exist when you rely on a babysitter or nanny for childcare.
Do You Have to Declare Babysitting Money?
If you have you children watched by someone in your family, you don’t have to pay taxes. This would include a parent watching the kids, grandparents and even siblings. If this is the case, you are currently off the hook and don’t have anything to worry about moving forward.
Many people have young babysitters from time to time. If you have a person that is under the age of 18 babysit for you on a somewhat regular basis, you don’t have to worry about withholding any taxes. This changes if you pay them over $1,000 in a quarter and this is their primary job. If they happen to be a student, this won’t be considered to be their primary occupation and you are again, off the hook.
Working for a Nanny Agency
If you are hiring a babysitter that is older, you may want to consider using an agency. The reason for this is the fact that they are going to be handling all the withholdings for their employees and you won’t have to bother with it. They are considered employees for the agency rather than your employees.
How Often You Use the Babysitter
This is a more confusing question. You will need to figure out if the babysitter you have working for you is considered your employee or is considered an independent contractor. If you are only occasionally calling up this person to see if they are available to babysit for you, they are going to most likely be considered an independent contractor. When you have them only working for you on a strict babysitting schedule, and you are paying them more than $1,000 per quarter, they are more than likely going to be considered your employee.
Tax Preparation, Filing & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have a babysitter that has been working for you on a regular basis and fits all of the guidelines for being an employee but you don’t know how to move forward, you can rely on the experts at Mark Dicus & Company to help you smooth it all out. We can help you with all of your tax needs as you navigate what you are responsible for and what forms you may need to give your employees. Call us today!