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Families in a NannyShare or hiring part-time or short-term caregivers have a unique tax break opportunity
Families who hire on a short-term (i.e. summer nannies), part-time or shared
basis have a unique tax advantage. Since employer taxes are tied to wages, these
families typically have a much smaller tax obligation but still get to take full
advantage of the tax breaks. Here's an example:
The Smiths hire a summer nanny and pay her $500 per week for 13 weeks ($6,500 total).
The Smiths have access to a flexible spending account at work, which allows them
to pay for up to $5,000 of childcare-related expenses using pre-tax dollars. This
saves them $2,300. Meanwhile, the Smiths owe about $600 in employer
taxes. The net savings for the Smiths is $1,700!
As you can see, legal pay pays off – especially in short-term, part-time or NannyShare employment
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