How to Talk to Your Employers About Being Paid Legally by Lora Brawley of Nanny Biz Reviews It’s never too late to talk to your employer about taxes! What Are the Advantages to You? Proof of Income rent an apartment, get a car or home loan Social Security & Medicare research shows the average legally-paid household employee will receive in retirement $5 for every $1 they contributed Unemployment Benefits Disability financial help for any disabling injury or illness that doesn’t result from the workplace (includes maternity leave) Workers’ Compensation financial help with lost wages and medical expenses due to injury or illness in the workplace Earned Income Tax Credit nannies may qualify for this federal tax break if they meet the criteria Safe From Audit thanks to Breedlove and Associates for info Selling Points For Your Employer safe from audit, back taxes, interest, penalties and fines stay out of legal hot water: it’s rare but an employer can be criminally charged with tax fraud and can lose professional license providing legal protections to your nanny is just the right thing to do important piece of YOUR healthy employment relationship essential that you live in integrity Know the Numbers Know what you need to make in gross (before taxes) income. Use a payroll calculator to figure out the gross vs. net wages. Know your bottomline rate and how far you’re willing to compromise. Know what it will cost your employers. (About 9 to 11% in payroll taxes) Understand the tax breaks your employer might be eligible for. flexible spending account child care tax credit nanny health insurance as non taxable income tuition non taxable income public transportation non taxable income nanny health insurance tax credit Getting to the Conversation: When You’re on the Job Getting to the Conversation: When You’re on the Job Nanny: David, I have something I’d like to talk to you about. It should only take about 5 or 10 minutes. Do you have time one evening this week after the kids go to bed? Employer: What’s going on? Nanny: There isn’t a problem. I recently took a class on nanny taxes and I’d like to talk with you about the information they gave us. Employer: What did they say? Nanny: I’d really like to talk with you at a time when we both can focus on the conversation. Would an evening this week work for you? Employer: Well, Friday night would be the best. Nanny: Great, I’ll plan on being here at 8:30. Will that give you time to get the kids to bed? Employer: OK, that will work. The Conversation: During the Interview Stage sell before you talk about money through job search portfolio and phone interview confirm you’re both on the same page around wages and taxes know your bottomline and recognize that not everyone is willing to pay taxes The Conversation: During the Interview Stage the not so cooperative prospective employer The Conversation: During the Interview Stage the cooperative prospective employer The Conversation: When You’re on the Job Nanny: David, like I said the other day I recently went to a workshop on nanny taxes. Being paid on the books will let me save for retirement, collect unemployment if this job ends, claim my income so I qualify for financing and build a reportable work history. After hearing all the benefits of being paid legally and thinking about my responsibility to pay my fair share, I realized I need to begin paying taxes on my income. I know this wasn’t part of our original agreement and it will increase your childcare costs. However it’s important for me as a professional to pay taxes on my wages. I did some research and there are tax breaks for you that can lower the amount of taxes you pay. Sometimes by quite a bit. Communication Tools making their arguments your own State their objections or justifications before they do – this takes the emotional impact out of those statements and allows you to focus on what you need to say instead of being distracted by the need to respond. EXAMPLE: “David, I understand nanny taxes weren’t an expense you figured into your childcare budge and if you want to do them yourself, it will add another task to an already busy schedule. However, it’s important for me to pay taxes on all of my wages.” I statements Take responsibility for your feelings and actions without making excuses or assigning blame. EXAMPLE: “Although I haven’t paid taxes on the money I’ve earned in the past year, it’s important for me to begin paying taxes now.” Communication Tools broken record Stay on track by stating your position over and over again. EXAMPLE: “it’s important for me to pay taxes on all of my wages.” pregnant pause When you have said what you need to say, stop talking. EXAMPLE: The Conversation: When You’re on the Job Where Your Employers Can Get Help HomeWork Solutions (www.4nannytaxes.com) Special deal for employers referred by Nanny Biz Reviews free telephone tax consultation Let their tax experts address all concerns at no cost or obligation. free payroll analysis Determines the employee's payroll deductions and the employer's tax obligation and budget. free registration with taxing authorities to establish employer accounts free New Hire Reporting - a legal requirement of all U.S. employers Breedlove and Associates (www.Breedlove.com) Where You Can Get Help Nanny Biz Reviews >> nanny resources >> nanny training >> talking to your employers about taxes link to this video; please share with your nanny friends and group! downloadable handout that outlines what I’ve shared here today downloadable handouts to give or email to your employers links to payroll tax calculators links to Nanny’s Tax Questions Answered by Kathy Webb series