Comments on: Ask the taxgirl: Babysitter Bonus

By: 10 Uses for Leftover Halloween Candy — and the tax consequences! | Loggins And Associates, P.C.

Mon, 07 Nov 2011 14:07:20 +0000

[...] employees are not really gifts. No matter what you want to call it (a thank you, a bonus, a perk), a gift made to an employee is compensation as far as the IRS is concerned. However, there’s an exception to this rule for small non-cash gifts which are considered de [...]

By: joel

joel — Fri, 14 Oct 2011 13:13:46 +0000

i was wander i have a babysitter 5 days a week and have one on some weekends that stays with us we own our own business and i was wandering if this would count as a pay check to the babysitter if we use our business check book for it and count the babysitter as if she was an employee.

By: Ask the taxgirl: Deducting Gift Cards | taxgirl

Ask the taxgirl: Deducting Gift Cards | taxgirl — Wed, 03 Jun 2009 00:51:24 +0000

[...] For specific information on holiday gifts and bonuses, see my prior post on the subject. [...]

By: Ask the taxgirl: Lotto Winnings & Other Income

Ask the taxgirl: Lotto Winnings & Other Income — Sun, 04 Jan 2009 05:19:29 +0000

[...] believe that the money that you receive at Christmas is taxable. It is not really a *gift* (read more about gifts and bonuses here). It’s an acknowledgement of good service. In that way, it’s like a bonus or a tip. And [...]

By: Kelly

Kelly — Fri, 19 Dec 2008 14:34:08 +0000

Joel,

The statute (section 119, I think) specifically excludes the room & board from income, so you shouldn’t record it as taxable income. Since there’s no corresponding expense, there should be no credit or deduction.

I think the distinction is that this is not meant to replace otherwise taxable income (meaning the rental), it supposed to be something for the convenience of the employer.

By: Joel

Joel — Fri, 19 Dec 2008 05:58:24 +0000

OK, with the value of room and board for a live-in nanny, it is excludable from her wages; but what does it mean for the parents? Are the parents allowed to claim child care credit from providing the value of room and board?

To complicate the matter just a tiny bit, would the parents have to recognize this as a taxable event and record an income, where the parents would have normally rented out a space in their home for rental income, but in this scenario, is bartering rental space in exchange for nanny services?

Thank you for your previous reply.

By: Cash Gifting Forums

Cash Gifting Forums — Fri, 19 Dec 2008 03:44:47 +0000

What if you have a live-in nanny, would letting her live rent-free in exchange for babysitting be consider a tax-free benefit?

By: Kelly

Kelly — Fri, 19 Dec 2008 00:42:47 +0000

You are absolutely correct. For federal purposes (state tax laws may vary) you can exclude the value of room and board for a live-in nanny if:

1, It’s at your home (and not, say an apartment down the street);
2, For convenience purposes; and
3, It’s a condition of employment.

With respect to meals at your home, it doesn’t matter if the nanny is live-in or not, it’s still exempt since it’s primarily for your convenience. The nanny can’t just leave during the day to go get her own food – who would watch the kiddos?

By: Joel

Joel — Fri, 19 Dec 2008 00:12:05 +0000

What if you have a live-in nanny, would letting her live rent-free in exchange for babysitting be consider a tax-free benefit? I recalled reading something that if it is for the convenience of the employer, housing (and meals) expenses are not taxable to the employee.

Joel

By: Ask the taxgirl: Gifts to Spouses | taxgirl

Ask the taxgirl: Gifts to Spouses | taxgirl — Thu, 18 Dec 2008 05:14:46 +0000

[...] here you go… My answer is yes. As I pointed out in a prior post regarding holiday gifts, the general idea of a gift is that you’re making it out of “love and [...]