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  • Nanny Costs?

    Hi,
    we are planning on getting a full time nanny in a few months when our baby is ~3 months old. We are expecting soon!

    we would like to pay the nanny with a W2. No under the table pay.
    do any of y’all pay through your PLLC? My wife (physician) is an independent contractor, and someone suggested that we can hire and pay the nanny through her PLLC.

    I’m a W2 physician, but I have a side gig that generates 1099, so I won’t be able to pay nanny through anything.

    any thoughts on using wife’s PLLC? She is a single employee of her S-corp.

  • #2
    No

    Comment


    • #3
      https://www.gettaxhub.com/can-i-dedu...my-tax-return/
      Might want to consider how it is reported and deductible. Seems much cleaner if you keep it as a personal expense.

      Comment


      • #4
        A nanny as a business expense??

        Comment


        • #5
          Care.com

          Comment


          • #6
            We did not pay our nanny through the company, but our accountant suggested that we do that and then declare the income.

            Our accountant is an above board, by the book, always legal kind of guy, so paying through the business and then declaring the income is likely considered acceptable by the IRS.

            Comment


            • #7
              can't really imagine this is going to save you much money while it sounds like it's going to add a decent amount of complexity.

              i know i'm not an accountant or a financial planner but a fairly solid rule of thumb i apply is the following:
              a) am i running an actual company? if no go to B
              b) am i trying to do some kind of complex accounting that involves LLCs, PLLCs, s corps, etc so as to pretend like I am an actual company despite have no office, no employees, and no business aside from my medical practice? if yes go to C
              c) don't do that

              i'm sure there are exceptions, but i would start at (c) and try to find them

              Comment


              • #8
                the most obvious problem that comes to mind with this is your wife is going to have to put aside 7.65% of her pay for FICA.
                What kind of retirement plan does your wife have? Is she going to be required to cover the nanny after a year?

                Comment


                • #9
                  Pay your nanny as a household employee because that is what they are. We use myhomepay. It's very easy as they generate a paystub each week and auto deduct our quarterly tax payments and make sure everything is done correctly. It costs $200/quarterly I believe. You could diy but this has worked well for us for many years now.

                  Congrats on the new baby!

                  Comment


                  • #10
                    There is no way the nanny is a legitimate employee of your spouse's PLLC and it would be improper to pay her through that businesses payroll.

                    As pointed by wideopenspaces the nanny is household help and that is the only proper way to pay her.

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                    • #11
                      Ok that’s what I thought. It was actually an accountant who suggested that, and it seemed like a stretch to me.
                      I follow the book on everything, and I won’t complicate this.

                      thanks everyone for the clarification!

                      Comment


                      • #12
                        Whatever you do, avoid Nanny Lane like the plague.

                        I’ve had a great experience with NannyChex.

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                        • #13
                          Originally posted by WorkforFIRE View Post
                          Ok that’s what I thought. It was actually an accountant who suggested that, and it seemed like a stretch to me.
                          I follow the book on everything, and I won’t complicate this.

                          thanks everyone for the clarification!
                          I would actually suggest asking the accountant the reasons for the recommendation. Why?
                          Feel free to let us know how that works out.

                          Comment


                          • #14
                            Originally posted by Tim View Post

                            I would actually suggest asking the accountant the reasons for the recommendation. Why?
                            Feel free to let us know how that works out.
                            Tbh, it caught me off guard. It had never crossed my mind. I asked her why…accountant suggested that I could write off all payroll expenses…

                            I wasn’t planning on doing it. But I wanted to see what WCI community said and if I was missing something. Now, I’m definitely not going to do this.

                            Comment


                            • #15
                              Originally posted by WorkforFIRE View Post

                              Tbh, it caught me off guard. It had never crossed my mind. I asked her why…accountant suggested that I could write off all payroll expenses…

                              I wasn’t planning on doing it. But I wanted to see what WCI community said and if I was missing something. Now, I’m definitely not going to do this.
                              The value of advice is probably more important than the cost. At least the advice here is free. Actually, pretty high value as well.

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