So we actually pay our nanny legally, filing all the right forms, paying all the right taxes, etc. I have an employer identification number and everything.
The experience has been fairly stressful. The various state and federal agencies involved don’t really distinguish between someone like me and someone who runs a real business and has several employees and a dedicated payroll person. It’s no wonder that many (most?) people don’t do this legally and I think the government would be doing itself a favor if it radically restructured the way people with housekeepers, nannies, etc had to interact with it.
I’m paying twenty bucks a month just to have a service (www.paycycle.com) keep track of what form I need to file when, fill the information in for me, and email me when it’s time for me to do something. And that’s all they do; they don’t handle my payroll for me, don’t send checks, don’t actually file these forms for me with the IRS, etc. Really, I’m completely relying on them to keep me out of jail because I’m not sure I could keep track of it myself.
