Wife working as a nanny

She can deduct work clothes.

Her cell phone bill for work purposes.

Certain supplies that she may buy for the job.

Miles driven in her car if she has to drive the children anywhere (but you cannot deduct the miles spent commuting to work, like her traveling to and from the job)

Any kind of business licenses she may have to acquire.

Meals spent while working.

These are just a few things I can think of for a nanny.

Your CPA or whomever may just deduct a percentage of some of these expenses (like the cell phone bill) since much of it will be used personally more so than business.


Also, you may want to try and pay some quarterly estimated taxes since she won’t have any withholding with her independent contractor status. This will help lower and spread out your tax liability come tax time.

quote:

---

We file married jointly and our taxes need to be handled properly for my career’s sake.

---

If you want better protection, form an LLC for her services. If she’s the sole owner of the LLC, you could recognize the business on your 1040 personal tax return (In Louisiana, a husband and a wife can still be considered a sole owner together since it’s a community property state. This means both of you can be members. It may cause confusion with the IRS, but it’s legal. To avoid confusion, you could just make her the sole owner.) It looks like you live in Tennessee, so it would have to be just her as the owner in order to avoid a separate tax return.

Ya'll may be fine with 1099 but will IRS? From what I've read seems like she may not fit the bill. I'd seek legal advice along with perspective employer/client if they're going to try to skirt the rules.

If she’s paid more than $2600 they will also need to pay half of her FICA. IRS has some stupid justifications for nanny being a “household employee”. It’s a disaster for all involved.

quote:

---

What's a round about cost for a nanny if I may ask? I guess it fluctuates depending on # of kids and what they do. Im going to need one soon.

---

$20-30 per hour is a healthy estimate

quote:

---

hey want to 1099 her for their tax purposes and I’m fine with it.

---

Just because she calls herself a contractor (as opposed to an employee) doesn't mean she is actually a contractor under IRS rules. In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

LINK

quote:

---

How much do you make?

---

My W2 income falls in the OT Poor tax bracket of 24% 190,750 - 364,200.

quote:

---

$20-30 per hour is a healthy estimate

---

This is pretty much in the ballpark for the situation in question. 1 child, one year old (not a newborn) in Atlanta suburbs.

It may be hard for them to “1099”.

Does she have other customers?

Does she control work hours or space?

Independent contractors have to answer some questions.

If you work for one person, you are most likely an employee.

If you have to work exact times, you’re most likely an employee.

Be careful. Actually, they are the ones at risk.

quote:

---

Wife working as a nanny

---

This might be the money board, but we still have rules.

"Be careful. Actually, they are the ones at risk."

I have a family member in a situation in which I feel that they should be an employee, but they are a 1099 contractor. I think the employer is on the hook. From the IRS:

"If you classify an employee as an independent contractor and you have no reasonable basis for doing so, then you may be held liable for employment taxes for that worker"