Please explain the administrative overhead involved in hiring domestic help in Ohio

June 8, 2008 5:50 PM

Has someone previously cut through the thicket of regulations pertaining to hiring domestic help? Social Security? Federal withholding? State withholding? Arrrgh! I'm in Ohio.

I'll be dealing with two people who work approximately 2hrs and 12hrs a week. The total yearly wages would be ~$1500+~$9000. Specifically, I'm in Cuyahoga County. Please don't tell me I have to deal with them, too.

I figured I needed the hive's help when I downloaded a PDF formatted application just to see if I even needed to deal with state unemployment compensation. One of the fields was for our IRS employer identification. The form asked for information about hours worked which seemed odd. They've been working and I've been paying them but if this were by-the-book wouldn't this form come before any actual work?

It's no wonder everyone pays their maids and nannies under the table. Frankly, I'm afraid that I'll be the only person in Ohio who's actually doing this legitimately thus eliminating the possibility of finding someone who can actually explain this. If you're one of the brave few to have managed it on your own, I welcome your guidance.

What do I need to do to get this setup? Like, exactly which forms and in what order? Then what do I need to do on a continuing basis and how often? Again, like you're explaining it to someone who needs an extension on his taxes every year because he's a ninny.

We do have an accountant but I would prefer to rely on him less rather than more.

Now if you'll excuse me, I have to go uncrumple my tax forms.

posted by stuart_s to law & government (7 comments total)

My answer is two-fold:

1. Google "nanny tax" (Zoe Baird ring a bell?) and you'll find what you're looking for.
2. Once you've reviewed the search results from Step #1, you'll see why paying your accountant to do this right is far cheaper (and probably more accurate) than trying to do it yourself.

Not trying to be snarky, but you have to think of the cost/benefit of trying to do something like this yourself. What could you be doing/earning instead of wading through gobs and gobs of 'net searches/sites trying to figure it out for yourself.

No, I'm not an accountant.
posted by webhund at 6:04 PM on June 8

This is why people use agencies!

The second easiest thing to do is have them be an independent contractor and give them enough money to cover the difference in SSI on their end so it isn't costing them more to be employed that way. An employer I had in college did that for her domestic and farm help and also offered to have her accountant or H&R do everyone's taxes (for free) to make it easier. We truly were independent contractors btw, she wasn't fudging it, we could set our own hours within reason and provided most of our own equipment. It allowed us to deduct things we bought for work which was nice. And it's probably still cheaper for you than an agency.
posted by fshgrl at 6:06 PM on June 8

I should have added that I'm not exactly the busiest person in the world myself. I'm my father's primary caregiver but that's mainly a lot of passive "work". Ie. sitting around. If I could figure out what was necessary, I should be able to handle a small number of forms every few months.

Also, I'm spending less this way then I would with an agency. Certainly less than the only one that I know anything about. Now that I have a business relationship with my helpers, I'd prefer to stick with them. I'm happy with both of them and one is better by far than I could ever hope to get with a random draw from an agency.

Finally, I don't think I could treat them as contractors. I set their hours; they don't provide any equipment; etc... If there's a legitimate way to treat them as contractors, I'm certainly open to suggestions.

Thanks, fshgrl and webhund.
posted by stuart_s at 6:16 PM on June 8

One solution is to have a payroll processor do all of this for you. ADP is one company I've worked with before and their automated quote app says they'd charge you around $50 per processing on a bi-weekly pay schedule.
posted by hjo3 at 6:44 PM on June 8

I don't know about the nanny, but you could require the cleaner to provide equipment. You could also ask them about availability and book according to what suits your schedule. So then they're providing their own equipment and setting their own hours.

IANAL, etc.
posted by acoutu at 8:56 PM on June 8

I have used an online service for my nanny for the past 2 1/2 years called Paycycle. I pay $19.99 a month and it makes sure I file all the right forms, calculates all withholding and owed payments, and even allows me to direct deposit my employee's check (and any reimbursements). It tracks sick and vacation time as well. We use an accountant to file our taxes and I just give him all of the forms and reports from Paycycle and they have always been correct. Paycycle has a free trial so you can look around and see if it meets your needs.
posted by saleenl at 9:05 PM on June 8

I would suggest that you consult an accountant who can walk you through the forms you need to use, one time, and then you can go at it alone.
posted by sondrialiac at 8:52 AM on June 9