What Can Happen If You Don't Pay Your Nanny Legally 🚓

Hi everyone! Laura back with my next video "What Can Happen If You Don't Pay Your Nanny Legally 🚓" about what can happen if you don't pay your nanny legally. Trust me....you need to watch this video if you are currently or are thinking about working with a nanny!
Learn more about our nanny payroll service here: nannyparentconnection.com/pay...
0:00 - Intro
0:27 - Ways To Pay Your Nanny
1:43 - Paying Under The Table
2:47 - Downsides Of Not Paying Payroll Taxes
5:41 - Example Situation Of Not Paying Your Nanny Legally
6:12 - What Can Happen If You're Caught Not Paying Taxes
#payingnanny #parentingtips #howtopaynanny #householdpay #paylegally #whatcanhappen #nannycare

[@user-nh3gu1ge3d]

Paying your nanny under the table isn't (usually) tax evasion. If anything, it's paying extra tax. Let's say, to make things easy, you make 100k and have an effective tax rate of 24%. You pay 24k tax. You pay your nanny 4k "under the table". You paid $1,263 tax on that money already. If you "wrote it off" and made the nanny pay taxes on it, you'd keep that 1.2k, and the nanny would pay taxes on her 4k. And she'd probably pay a much lower tax rate, since the nanny generally is making much less than the ones hiring a nanny, and we have a progressive tax rate in this country, meaning tax rates go up the more you make. Case A: You make 100k, you pay 24k in taxes, you give the nanny 4k. You are left with 72k. Nanny pays 0. IRS gets 24. Case B: You make 100k, you pay the nanny 4k, you pay 24% of 96k in taxes which is $23,040. Nanny likely pays 12% (if that) on 4k which is 480. IRS gets $23,040 from you and 480 from Nanny, meaning they got $23,520. IRS got 480 dollars less. Of course, if you're a drug dealer and don't pay taxes at all, and then give that money to your nanny, then THAT is tax evasion. I'm not sure you'd get in trouble for overpaying taxes, but I'm not a tax specialist. Am I wrong? Explain why. Source: What Is an Effective Tax Rate? 12% for incomes of $9,876-$40,125. 22% for incomes of $40,126-$85,525. 24% for incomes of $85,526-$163,300. 32% for incomes of $163,301-$207,350. 35% for incomes of $207,351-$518,400. 37% for incomes above $518,400. www.thebalance.com/how-to-calculate-your-effective-tax-rate-4685263

[@nannyparentconnection7119]

I follow what you are saying but the IRS disagrees with you!

[@user-nh3gu1ge3d]

@@nannyparentconnection7119 I'm not sure they do, in reality. There's a difference between technicality and reality. I know *technically* what you say is correct, however, in practice is anyone going to care? No. Probably not. The audit rate is, what, a half of one percent? And most of that is people making 10 million plus. Seems like we're splitting hairs here for no reason. Whatever. You do what you want with your taxes.

[@nannyparentconnection7119]

I hear you but I have spoken to several parents that have been audited due to employing a nanny. I agree that the audit rate is low and some parents might try to "play the odds" but I would never recommend that to a parent. Thanks for discussing this with me!

[@baine3388]

Meanwhile some truck drivers who don't own their trucks and can only transport for a specific company are set up as 1099 employees. Parts of the tax code are just straight-up evil.