Babysitter in the home

[mdmcfarland]

My son and his wife have decided to hire a babysitter to come to their home this summer. They have always sent their kids to daycare. Both of them work. I assume her main job will be child care, however, I also assume she will prepare at least some of the meals (breakfast and lunch).

I'm not sure of the details of the agreement they have with their sitter. Should I advise them to get a FEIN and withhold social security and medicare? I'm leaning towards that - but if unnecessary they wouldn't have to go to the bother.

Since they both work, I know they will want the child care deduction.

I know the person they are planning to hire (she is 19 or 20 and the kids are familiar with her). She also has some self employed farm income of her own, so I know she files a return herself. I don't feel it would be fair to her to have to pay self employed taxes herself if they don't withhold.

They have never done this so I'm sure they would have no objections - they would want to do it the right way. I just don't want anyone to get into trouble if they don't handle it properly.

[cpabsd]

Per TTB, if cash wages are greater than $1600 for the year, withhold SS/Fica/Federal. If wages are greater than $1000 in any calendar quarter, then taxpayer must pay FUTA also. Hope this helps.

[michaelmars]

don't forget sui, dbl and work comp

[mdmcfarland]

don't forget sui, dbl and work comp

I was hoping they wouldn't apply. So much for trying to keep things simple.

[Lion EA]

It's common for a household employer to pay for his employee's FICA. Employee might choose not to have FIT and SIT w/h. Employer settles up for federal payroll taxes, including FUTA on his Schedule H with his Form 1040. Check with what his state requires for household employer filings.

[bay]

I also tell me clients to call their PC Insurance Person to make sure that if something happend to the babysitter in the house that they would be covered by their homeowner's policy -in regards to taxes - my clients usually complete the Schedule H

Good Luck

[jainen]

>>they would be covered by their homeowner's policy<<

That's probably not good enough, regardless of what the agent supposedly promises. Babysitting is a relatively low-risk job, but things do happen. Worker's Comp is one of the very toughest areas of labor law. You could lose it all.

[SunTaxMan]

>>they would be covered by their homeowner's policy<<

That's probably not good enough, regardless of what the agent supposedly promises. Babysitting is a relatively low-risk job, but things do happen. Worker's Comp is one of the very toughest areas of labor law. You could lose it all.

You know what it means to assume (that the homeowners' policy would cover)?