Reporting Wages for Domestic Help

Remember the contoversy surrounding the appointment of a Supreme Court judge and other elected officials over the so-called "nanny" tax?

Clients often approach tax preparers with questions regarding compensation for help like nannies, yard men, babysitters and others. The classifications for employees versus non-employees for reporting purposes is a very gray area.

According to the Wisconsin Institute of CPAs, one of the best ways to look at a situation is to think about who's in charge, whose equipment is being used, where the work takes place and how much is being paid, not what the worker actually does for you.

The issue of "control" is the overriding concern, as far as the IRS goes ... if you are setting the work hours, telling the person what to do and generally "controlling" the situation, then the IRS feels the person's income should be reported.

You may like these other stories...

There it stands, your client's 100-year-old, rickety, vermin-infested barn or former hotel or whatever the darn thing once was. And she's considering what to do with it. There are two words that can help her decide...
It's not a reality—yet—but accounting software is poised to eliminate accountants. We are at a tipping point for many similar professions: online education replacing professors, legal software replacing...
Did you know that the tax code allows you to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes, and others kinds of casualties? But the law imposes several restrictions.Relief...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.