Using a payroll service for an independent caregiver

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Topic Author
wolsanford
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Joined: Sat Jul 13, 2019 8:18 am

Using a payroll service for an independent caregiver

Post by wolsanford » Sun Aug 11, 2019 10:29 pm

My sisters and I are hiring an independent caregiver to help our father (dementia) and stepmother (leukemia) who live in Virginia. All of us live at least a couple hours away although we are rotating spending time there. We are trying to understand the ins and outs of withholding and reporting requirements related to Social Security, Medicare, unemployment and income taxes. We are wondering if it is worthwhile to engage a payroll service to manage this for us, since we all have a lot on our plates and are looking at ways to simplify our tasks so we can maximize the time we devote to spending with them rather than working as administrators of their caregivers. Have any of you had experience, good or bad, with these types of payroll services and are they worth the money, or is managing caregiver pay pretty simple once you get set up?

dbr
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Re: Using a payroll service for an independent caregiver

Post by dbr » Mon Aug 12, 2019 10:24 am

I have managed a caregiver myself. I think it is a fair statement that it is not terrible once it is, as you say, "set up." At least that is true if you are good at bookkeeping and tax preparation and don't find those chores onerous at all. For 99% of the people I know a monthly root canal would be preferable and 95% of the people I know would not be capable of figuring out how to do it. It was ok for me. YMMV

Unfortunately I have no experience with hiring an agency to do this.

Regarding your list, you left out workers compensation insurance and any steps you might take to add insurance for your own personal liability or the personal liability of the person cared for. Imagine, for example, your employee running down a mother and small children while driving a car to run errands for your parents, such as to buy food. I don't think a payroll service deals with those issues, but hiring an agency would.

Taken all in all everything involved worked much better when elder care needs were met in a residential facility rather than by home care. This was true not only regarding payroll and insurance issues but also that a facility can have far greater resources available than can be provided at home. You are also relieved of home maintenance issues and a lot of personal affairs issues that come up.

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dm200
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Re: Using a payroll service for an independent caregiver

Post by dm200 » Mon Aug 12, 2019 10:42 am

wolsanford wrote:
Sun Aug 11, 2019 10:29 pm
My sisters and I are hiring an independent caregiver to help our father (dementia) and stepmother (leukemia) who live in Virginia. All of us live at least a couple hours away although we are rotating spending time there. We are trying to understand the ins and outs of withholding and reporting requirements related to Social Security, Medicare, unemployment and income taxes. We are wondering if it is worthwhile to engage a payroll service to manage this for us, since we all have a lot on our plates and are looking at ways to simplify our tasks so we can maximize the time we devote to spending with them rather than working as administrators of their caregivers. Have any of you had experience, good or bad, with these types of payroll services and are they worth the money, or is managing caregiver pay pretty simple once you get set up?
Perhaps check with the independent caregiver what other or previous employers have done or used.

Topic Author
wolsanford
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Re: Using a payroll service for an independent caregiver

Post by wolsanford » Mon Aug 12, 2019 12:15 pm

Thanks for the advice. I think we can manage setting it up, it's more the nuisance of staying on top of it. We are pursuing workman's comp insiurance, even though it's not required in VA for this situation. Hadn't thought about the personal liability aspect though so we will look into that.

dbr
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Re: Using a payroll service for an independent caregiver

Post by dbr » Mon Aug 12, 2019 12:31 pm

One of the nuisance factors is payments and returns that have to be sent in quarterly. It would be one thing to just sit down a couple of months after year end and fill out some forms. Oh, I also forgot about adhering to wages and hours laws, aka overtime. You have to track that. In our case to cover everything we actually had two employees to avoid overtime and because they didn't want to work more than a regular day.

Topic Author
wolsanford
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Re: Using a payroll service for an independent caregiver

Post by wolsanford » Mon Aug 12, 2019 2:17 pm

Here's a related question - my understanding is the we need to obtain an EIN; however we have also been told (by a lawyer, not a tax expert) that we do not need and EIN and can use our parents' SSNs. DO you know if this is correct? I see nothing in the IRS information I have seen which suggests you can use a SSN.

dbr
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Re: Using a payroll service for an independent caregiver

Post by dbr » Mon Aug 12, 2019 3:37 pm

wolsanford wrote:
Mon Aug 12, 2019 2:17 pm
Here's a related question - my understanding is the we need to obtain an EIN; however we have also been told (by a lawyer, not a tax expert) that we do not need and EIN and can use our parents' SSNs. DO you know if this is correct? I see nothing in the IRS information I have seen which suggests you can use a SSN.
It's been awhile and I don't remember now and the paperwork is buried somewhere. We probably had an EIN. I remember obtaining a tax guide from some online source that explained all the ins and outs of hiring personal care employees but that would be about two computers ago and long gone. I would suggest some research on line and there were/are a book or two on the subject.

You can look at the forms and I think most of them are formatted for an EIN and not an SSN. You would see that looking at Form 941, W-2, W-3, FUTA etc. Publication 15 is the Employer Tax Guide.

BarbBrooklyn
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Re: Using a payroll service for an independent caregiver

Post by BarbBrooklyn » Mon Aug 12, 2019 3:51 pm

Call the IRS and ask about the EIN vs SSN.

There is a wonderful caregiver's website, www.Agingcare.com. someone over there knows the answer, I'm sure.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

Rudy63
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Re: Using a payroll service for an independent caregiver

Post by Rudy63 » Mon Aug 12, 2019 4:04 pm

Hi,

We use Nannychex, and they have been very simple, walking through the process, ensuring tax compliance, worker's comp, overtime calculations, etc. I think we pay $12.50/bi-monthly paycheck. I would recommend them.

All the best,

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Artsdoctor
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Re: Using a payroll service for an independent caregiver

Post by Artsdoctor » Mon Aug 12, 2019 6:29 pm

wolsanford wrote:
Sun Aug 11, 2019 10:29 pm
My sisters and I are hiring an independent caregiver to help our father (dementia) and stepmother (leukemia) who live in Virginia. All of us live at least a couple hours away although we are rotating spending time there. We are trying to understand the ins and outs of withholding and reporting requirements related to Social Security, Medicare, unemployment and income taxes. We are wondering if it is worthwhile to engage a payroll service to manage this for us, since we all have a lot on our plates and are looking at ways to simplify our tasks so we can maximize the time we devote to spending with them rather than working as administrators of their caregivers. Have any of you had experience, good or bad, with these types of payroll services and are they worth the money, or is managing caregiver pay pretty simple once you get set up?
Some states have specific rules regarding the number of hours worked per day and week (California definitely does). There can sometimes be two types of labor law rules, one for the office and one for the home. The VA website should help you out with that and I would recommend that you do things "by the book" no matter how tempting it is to save money otherwise.

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