Why Can’t I Hire My Nanny as an Independent Contractor?

Because it is illegal! The federal government is cracking down on misclassification of employees. It may seem easier to have your nanny act as an independent contractor but your incorrect filing may be considered tax evasion by the IRS.

It will also be worse financially for your nanny to file as an independent contractor. She will end up paying more taxes because she will be required to pay self-employment taxes. If she hasn’t been keeping up with those additional taxes all year, she could end up owing a lot of extra money when she files her income tax returns. Also, she will not be eligible for certain government benefits such as unemployment if she were to lose her job.

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