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love2run
January 11, 2018

Paying a Nanny

  • January 11, 2018
  • 1 reply
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A friend of mine has been paying their nanny through her new small business.  She now knows this is not allowed and going forward will not pay her from the business.  But how does she handle this for 2017?  Should she issue the nanny a 1099 from the business? 

    1 reply

    Rustler
    Rustler
    January 11, 2018

    IF, if the business is taxed as a sole proprietor or a partnership, the payments need to be edited to insure that the expense for the payment uses owner equity drawing.

     

    Then the business is not paying the nanny at all, the owner is taking value from the business and using it to make a personal payment to the nanny.

     

    They need to contact a tax accountant in your state, depending on the situation the nanny can very well be considered an employee and she would have to do withholding for the "salary" she is paying her.  This has a lot more on the subject

    https://www.sittercity.com/parents/child-care-relations/guide-to-nanny-taxes

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