I'm in the process of hiring a full-time nanny. Anyone have a recommendation for payroll service for household employees? I don't mind cutting checks myself, but I don't want to have to keep track of taxes on my own.

Care.com's HomePay is an option, but it's expensive.
NannyPay looks more barebones.

Any other suggestions or tips?

Sorry I do ours on a spreadsheet. The taxes I track are Social Security, Medicare/Medicaid and Federal and state unemployment.

It's not too bad but I can understand getting someone to do it for you. Does the service pay the withholding into the IRS and Texas workforce commission or will you have to do that?

I pay in the estimated taxes to the IRS and TWC on a quarterly basis. Missed my last state unemployment payment by a few weeks and had to pay more in penalties and interest then I did in the tax (it wasn't much but the late fee was similar to a credit card late fee)

It looks like the more expensive ones actually make the tax payments. That's another thing I don't want to deal with myself.

SurePayroll sounds pretty good:

http://www.businessnewsdaily.com/7492-best-payroll-service-household-employer.html

Anyone use any of these?

I would do it yourself with Excel. It takes about 1.5 hrs to figure out and 5 min to do each month afterward.

The hardest part is figuring hours / pay, which you have to do yourself anyway.

ColinAggie said:

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Just cut her checks and have her 1099 it?

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Unfortunately the law says that nannies are w-2 employees and trying the 1099 route could open the OP to a world of penalties and back taxes if he went that route.

Thanks, all. I built a spreadsheet to come up with Pay to make the nanny an offer. I think I'll start with a payroll service and if it turns out to be simple I might switch to doing it myself. But I don't even do my own taxes--I don't want to keep track of someone else's

thisguy05 said:

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Thanks, all. I built a spreadsheet to come up with Pay to make the nanny an offer. I think I'll start with a payroll service and if it turns out to be simple I might switch to doing it myself. But I don't even do my own taxes--I don't want to keep track of someone else's

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You will most likely do the same amount of work reporting her earnings to the payroll company that you will typing it into a spreadsheet. With one employee I think you'll only have to file and pay quarterly.

About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

ColinAggie said:

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Just cut her checks and have her 1099 it?

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Not legal for a household employee

idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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In Austin we pay ours $15/hr. Pay is not the issue trust is. Finding one you trust is hard as well as getting someone reliable. At $15 hr including taxes I pay 650-750 a week.

About that much for full time.

idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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For one kid?

Fightin_Aggie said:

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idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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In Austin we pay ours $15/hr. Pay is not the issue trust is. Finding one you trust is hard as well as getting someone reliable. At $15 hr including taxes I pay 650-750 a week.

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I'm going with a salary set up so I don't have to keep track of hours and days. Will be about $600/week in Fort Worth for 1 kid.

You could definitely do in-home m-f nanny for 725 or less.

I realize the comment is tounge-in-cheek but from a practical standpoint, under the table cash eliminates the ability to claim the dependent care credit too.

Maybe that's ok if you pay the nanny a reduced wage since she probably wouldn't be reporting it on her taxes either.

03ki11erAG said:

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idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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For one kid?

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Sorry I should have clarified. I have a 3 year old, 18 month old, and 4 month old.

idAg09 said:

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03ki11erAG said:

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idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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For one kid?

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Sorry I should have clarified. I have a 3 year old, 18 month old, and 4 month old.

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No worries. And bless you sir. I have a 3.5 and a 2 year old. Can't imagine compounding that.

idAg09 said:

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03ki11erAG said:

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idAg09 said:

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About how much does a M-F nanny cost? I'm in nw Houston and pay $725 a week for daycare, so just curious..

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For one kid?

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Sorry I should have clarified. I have a 3 year old, 18 month old, and 4 month old.

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Cost goes up with more kids. If you could find someone you trust maybe. I think it would need to be a family member for that many kids at that cost.

Daycare may be your best bet if you can't find a reliable and safe family member

Why would you pay the government? Pay her cash no records unless you plan on being a politician.

Build It said:

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Why would you pay the government? Pay her cash no records unless you plan on being a politician.

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There are some horror stories here. Read the fine print right above where you sign and date your tax return. Probably won't be a problem unless you terminate them and they apply for unemployment, or want to borrow money and there is no record of any earnings, or file for social security disability.

Assuming he was hiring an illegal like a lot of people.

Fightin_Aggie said:

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ColinAggie said:

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Just cut her checks and have her 1099 it?

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Not legal for a household employee

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Maybe we did it wrong or laws have changed, but 10 years ago when my SIL was watching my son, we found wording that basically said, if she had the ability to dictate her work or how she did her work (i.e. no direct supervision), we could just give her a 1099. I want to say that her dad's CPA might have even pointed us in that direction but I've slept a lot since then. We did that for a couple of years before we went the daycare route when she moved.

lunchbox said:

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Fightin_Aggie said:

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ColinAggie said:

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Just cut her checks and have her 1099 it?

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Not legal for a household employee

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Maybe we did it wrong or laws have changed, but 10 years ago when my SIL was watching my son, we found wording that basically said, if she had the ability to dictate her work or how she did her work (i.e. no direct supervision), we could just give her a 1099. I want to say that her dad's CPA might have even pointed us in that direction but I've slept a lot since then. We did that for a couple of years before we went the daycare route when she moved.

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As an individual, you would have no responsibility to issue another person a 1099 since the service being provided is not connected to a trade or business. Just like you would not give a 1099 to someone doing the yardwork at your house, or an electrician, or plumber, HVAC person, or carpenter.

The wording you mentioned is one of several things that the IRS uses to classify employee vs. independent contractor. But any one item is not, by itself, likely to sway things one way or another.