Reducing Nanny Tax Costs
One client was upset about the additional cost of nanny taxes and called us.
- We explained two cost-saving options
- We determined the most valuable option
- The client signed up for a Flexible Spending Account
- The client saved $1,950 in taxes and loved that we were able to help her easily save some money
Resolving Issues with Government Agencies
When preparing nanny taxes on her own, one person filed the wrong forms, although she paid the correct tax amount. The state department of revenue sent her several notices stating the forms had not been filed.
- Since she thought she was in compliance, she ignored the notices
- When the government threatened to place a lien on her property, she asked us for help
- We determined what the department of revenue needed and completed the forms for her to submit
- With our help, the correct forms were filed
- While the problem was resolved, she was penalized for filing the incorrect forms
- Although the penalty stung, she was relieved that going forward she wouldn’t have to worry about which forms to file and when
Reducing Time Spent on Nanny Taxes
When preparing nanny taxes himself, one person spent countless hours obtaining forms, reading through the forms, computing withholding amounts, and preparing the forms. After several quarters, he called us for help.
- We reviewed the situation and discovered he was withholding too much tax
- We corrected the withholding, reduced his nanny taxes and increased the nanny’s take home pay
- We reviewed the registration forms and found he had multiple employer identification numbers
- We contacted the appropriate department, consolidated the accounts and payments and ensured the account was paid in full
- The client was thrilled to get rid of the frustrating details relating to his nanny taxes
Relying on Non-Nanny Tax Experts
When having their nanny taxes prepared by a large accounting firm, the firm incorrectly computed federal unemployment tax and failed to prepare the employer’s state unemployment tax forms. The IRS notified the state unemployment office, and the state unemployment office penalized the family for two years of unpaid taxes. The client came to us for help.
- We reviewed the tax forms and identified the problem
- We got the client registered for state unemployment tax and prepared the missing tax forms
- We prepared a letter to the state unemployment office explaining the problem and requested a waiver of fines, penalties and interest
- The client was happy he was now in compliance and although he had to pay the interest charges he was able to get his penalty waived