Managing taxes and payroll for in-home employees, like nannies or household staff, can be straightforward if you use a full-service payroll provider. Here’s an overview of how it works:

• Employee Classification: Household employees are typically classified as W-2 employees, meaning taxes are withheld for them. A payroll service will handle this for you, ensuring compliance with employment laws.

• Getting an EIN: You’ll need an Employer Identification Number (EIN) from the IRS, which a payroll service can guide you through or even complete on your behalf.

• Setting Up Payroll: A payroll service can handle paychecks, withholdings, and deductions, making regular payroll a smooth, automated process.

• Tax Withholding and Payments: Your payroll provider will take care of withholding federal and state taxes as well as Social Security, Medicare, and any required unemployment insurance contributions.

• Year-End Tax Forms: The service will provide your employee with a W-2 by January 31 each year and ensure that all necessary tax forms are filed.

To assist with these responsibilities, consider engaging specialized payroll services that cater to household employers:

• HomeWork Solutions: Offers comprehensive payroll and tax services specifically for household employers, ensuring compliance with federal and state regulations.

• HomePay by Breedlove: Provides payroll, tax, and HR services tailored for household employers, simplifying the complexities of household employment.

• GTM Payroll Services: Specializes in household payroll, handling all aspects of payroll processing, tax filings, and compliance to make household employment easier.

• Poppins Payroll: A streamlined payroll service offering affordable solutions for household employers, including payroll processing, tax filings, and HR support.

These services manage payroll processing, tax filings, and compliance, allowing you to focus on other aspects of household management.