Nanny Tax Outsourcing for CPAs

Outsource Nanny Taxes to Protect Your Clients

You know that your client’s taxes can be complicated. When they hire a nanny, a home health aide, or other household employee, things get even messier thanks to labor laws and the “Nanny Tax.” Because some household employers may not understand IRS tax rules and state laws around employing caregivers and housekeepers, they may turn to you for guidance. Fortunately, for CPAs looking to outsource nanny taxes, HomeWork Solutions is the perfect partner.

Fortunately, you can help your clients navigate the legalities of hiring a household nanny—and receive assistance along the way.

Why Are Nanny Taxes Important?

As a CPA, ensuring your clients understand and comply with their employment tax obligations as household employers is a must! Former employees can file for state unemployment benefits, which alerts the IRS that your client may have skipped paying their household employment taxes. Further, if a nanny ever finds cause to file a wage dispute against your client, as lack of tax payments could easily be exposed and your client won’t have complete payroll records that are legally required.

Other reasons why filing taxes is essential for your client include:

Ensures client’s ability to obtain worker’s compensation insurance
Protects against future liabilities
Qualify for a tax credit
Protect client’s future career opportunities
Ensures financial security for employees

A birds' eye view of a modern desktop with a laptop, coffee, and a tablet showing a checklist of the benefits of proper nanny tax handling for CPAs

CPA working at tax time staring at a computer wishing she had outsourced nanny taxes

How HomeWork Solutions Can Help CPAs Looking to Outsource Nanny Taxes

We’re committed to taking the burden of household payroll and taxes off your shoulders. When you outsource your client’s nanny tax to HWS, you get access to all tax records and filings for your clients (with their permission) in a central portal. This eliminates time spent asking your clients to send their tax information at year end. You can go get the information you need, when you need it. HWS offers flexible service plans that can be customize to your client’s needs, whether they are interested in full payroll services with direct deposit or simply quarterly and annual tax filings.

Outsource Your Nanny Taxes to HomeWork Solutions Today

We understand the demands of a CPA. Your responsibilities can range from acting as an advisor for small neighborhood businesses to serving the needs of America’s wealthiest families. Tracking the latest tax rules and labor laws for household employment is probably the last thing on your mind.

Let us take responsibility for ensuring the stress-free handling of household payroll and taxes for your clients. Since 1993, our nanny tax services have helped tens of thousands of families and CPAs navigate household employment challenges. Our expertise in the nanny tax services industry is the reason why CPAs, corporations, and International Finance Institutions (IFIs) partner with us.

If you’d like to ensure the accuracy and simplicity of your client’s nanny taxes, we invite you to reach out to us today. You can also request a free consultation to discuss customized solutions and special pricing for your unique requirements.

CPA FAQs and Resources

My client says her nanny is an “Independent Contractor?”

Many people are confused by the distinction between employees and independent contractors. This distinction is important because employers of household employees file and pay employment taxes. Independent contractors handle their own tax filings. The IRS determines worker classification primarily based on who controls the work being performed. If you have the right to control or define the work to be done and how the work will be done, and if you control financial aspects of the relationship, according to the IRS you are an employer. Read more

Is legally paying a nanny worth the trouble?

Many families mistakenly believe that paying their nanny cash, off the books, is easiest all around. After all, no complicated tax forms, the nanny takes home more money, the family doesn’t pay taxes, it sounds good all around. Until it isn’t good at all! Read more

Why won't a 941 suffice?

Household employers file and pay the exact same employment taxes as commercial employers do. The IRS established the Form 1040 Schedule H in 1995 to simplify and streamline the household payroll tax reporting. Often times, however, the household employer or their CPA are confused about the proper reporting and begin filing quarterly form 941 for… Read more »

Can't I just treat the caregiver as a 1099?

The IRS is increasing its focus on improperly classified domestic workers, including those hired as senior home care professionals. As an employer of a household employee, you must be aware of these changes for tax season. Misclassifying a household employee as an independent contractor can expose the household employer to multiple risks. An adult over… Read more »

What about workers' compensation insurance for household employees?

Nanny workers compensation insurance protects the caregiver and the employer from the expenses and liabilities associated with a work-related accident. A single accident can leave the household employer liable for thousands of dollars in medical bills. Don’t assume that this liability is covered under your Homeowner’s Insurance Policy! Most states require household employers to carry Workers’ Compensation… Read more »

Can an employer pay the nanny on the payroll of their own business?

Considering adding a nanny on business payroll? Nanny employers who own a business or a farm operated for profit can choose to include their nanny’s payroll in their 941 or 943 tax returns. The ‘nanny taxes’ are exactly the same employment taxes paid for other employees and do not require special calculation. What the sole… Read more »

How do Fair Labor Standards Act (FLSA) overtime rules to domestic employment?

Fair Labor Standards Act (FLSA) overtime rules and domestic employment are often misunderstood by the household employer. The temptation is to either agree to a weekly “salary”, agree to “average hourly rate” (pay $15 an hour for 45 hours for example) and or to average weeks (pay bi-weekly and average the two weeks hours to… Read more »

Why is my nanny an hourly employee? Can I pay her a salary?

Nannies and other ‘domestic service employees’ are classified under the Fair Labor Standards Act (FLSA) as non-exempt workers. The term non-exempt employee refers to a worker who IS subject to the terms of the FLSA regarding such issues as overtime compensation and minimum wage coverage, contemporaneous time tracking record keeping, as well as nanny pay frequency. FLSA requirements are determined not by the type of pay (hourly or salary) but by the type of work that is performed. Read more

Household Employment Laws by State

Different states and localities have different household employment laws. Here’s a handy page with links to all 50 states. See state household employment laws.

Talk to Us

HomeWork Solutions is committed to providing the best solutions to all of your clients. We offer customized solutions and special pricing for CPAs looking to outsource nanny taxes and household payroll.

We offer a comprehensive list of service options to fit your clients’ needs

Services & Pricing

Here’s what’s being said about our payroll and tax preparation services.

“I’m an attorney – I could do this myself but HomeWork Solutions is so easy to work with. Dealing with seniors every day, I know the assurance that required paperwork is completed accurately, reliably, and on time for elder care and other domestic employees is invaluable.”

— Stacy C., Washington DC

“Please renew my annual service. I did find a new nanny, Mary Poppins to be exact ;-), and I will be needing your services again. Thanks for a great service!”

— Janine M., Cary, NC

Take the Hassle Out of Nanny Taxes

Start the conversation with your clients today, and let us handle the rest.

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