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Hiring Help For Your Chicago Home? Find Out If You’ll Owe Taxes

September 21, 2010

With the housecleaning, the lawn mowing, the leaf raking and the snow shoveling, work on your Chicago home never ends. Sometimes, you just have to hire someone to help get it done. Or if you’re doing all the work yourself, chances are you’re going to need to hire a sitter sometimes so you can get a break.

All of the extra help makes life a lot easier until the tax man comes around. In case you or your home workers are audited, you’ll need to make sure you’re aware of the “Nanny Tax” rules.

Tax expert Eva Rosenberg recently posted an article on the topic on the

Equifax Personal Finance Blog.  In “

The Nanny Tax: How to Pay Nannies, Babysitters, and Home Help,”  Rosenberg says you will owe taxes for anyone who earns $1,700 or more working in your home (2010 figure) and doesn’t have a business license. You don’t have to pay taxes for workers under 18 (as long as they make less than $1,000 a quarter), your own children up to age 21, your spouse and (maybe) your parents.

Rosenberg posts links to IRS forms and information kits to help you figure out exactly what and when you have to pay. She also tells you about the required procedures. For example, you’ll need an I-9 form when you hire a new employee. That’s the one that requires two forms of ID, including a Social Security card. You also need to formalize things by keeping a time card on each home worker. You’ll have to take withholdings from each paycheck you issue to a qualifying worker, plus you’ll file estimated taxes each quarter. In January, you’ll need to provide forms so your workers can file their own tax returns, too.

In the end, it may seem easier just to do the yard work and the housecleaning yourself. Or, as Rosenberg suggests, you may hire a payroll firm to help you make sure you’re in compliance. You can learn much more on the topic and post your questions at the

Equifax Personal Finance Blog.

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About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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