Paying Taxes for Your Nanny

In today's society, where two income families have become almost a necessity, having a nanny has become more common. So, it is becoming increasingly important to know that not only is it the law to claim your nanny as an employee and tax her accordingly it is also financially advantageous to do so. Many make the mistake of looking to cut costs and pay a nanny in cash to avoid paying taxes but the opposite is true. There are many tax breaks an employer receives when he or she pays taxes for their nanny. By hiring a company like ours to register, prepare and file your taxes as well as your nanny's taxes it will remove all the worries and stresses you might have about doing the right thing and abiding by the law. People also feel better about doing so. Registering yourself as a business and having your nanny as an employee also helps define the relationship.

When people hire a nanny and everything is working out very well, at times people tend to feel indebted to their nanny for many reasons. For example: What would I do without her? How would I be able to have it all if it wasn't for my nanny? This can distort and confuse the relationship. Employers might over compensate by going out of their way for their nanny or look the other way when their nanny might take advantage of a situation. By having the mindset that this is an employer-employee relationship, it sets the tone for a future working relationship. When we have this mindset we look at the relationship differently. It is easier to recognize that this employee is dispensable. Like in any business it is wonderful to feel like a team and that everyone's a family but when push comes to shove the nanny is an employee and should be taxed as one.

At Tax4Nannywe are tax professionals who specifically specialize in Nanny tax preparation and filings. We will take care of the entire Ontario Nanny Tax filings required for your specific situation.