Raymond Hall, EA

Families looking for senior household staff often work through an agency. The word "agency" covers very different arrangements. Some agencies find a candidate, collect a fee, and step away. Others employ the worker and bill the family for the hours. The difference decides who files payroll returns, who issues the W-2, and who the IRS and the state look to if taxes go unpaid. This post covers how the main agency arrangements are treated for tax purposes, what the household should get in writing, and the records each arrangement needs. It does not evaluate or recommend any agency, and it is not advice on how to search for or select staff. Contracts with agencies are a matter for counsel. The question the IRS asks For a household worker, the IRS asks who controls what work is done and how it is done. IRS Publication 926 addresses agencies directly: if an agency provides the worker and controls what work is done and how it is done, the worker is not your employee. If the fami...

Most of the advice about hiring household help focuses on the candidate. This post focuses on the household. Before a family adds a house manager, nanny, chef, or caregiver to payroll, a few questions about its own tax setup decide whether the first year goes smoothly. One of them is uncomfortable: whether someone has already been paid off the books, and what to do about it. This post is a readiness check for the household's side of becoming an employer: cash flow for taxes, who approves payroll, which states are involved, the record system, and how to correct prior years where household wages were not reported. It does not evaluate candidates and it is not employment law advice. It is a list to work through with your preparer before the offer goes out. Part one: the household's own tax setup Can your estimated payments absorb Schedule H? Household employment taxes are paid with your Form 1040 through Schedule H. A full-time employee at $80,000 adds about $6,120 of employe...

Households that hire a full-time employee often choose between someone who lives on the property and someone who comes in each day. The choice is about the family's life and the job. The tax rules treat the two arrangements differently, starting with whether the room and meals count as wages and continuing into overtime, state withholding, and what the household has to document. This post covers the federal tax treatment of lodging and meals provided to household employees, how live-in status affects payroll and the new overtime deduction, and the records to keep. It does not advise on which arrangement to choose, and it is not employment or housing law advice. Wage and hour rules for live-in workers vary by state and belong to an employment attorney. The starting rule: everything of value is wages Unless an exclusion applies, anything a household employer provides to an employee as pay is wages, whether it is cash or not. That includes housing, meals, a car, and phone service....

When a household budgets for a house manager, nanny, chef, or caregiver, the number on the offer letter is usually the only number anyone writes down. The real cost is higher. Employer payroll taxes, state unemployment, workers' compensation, benefits, and the cost of running payroll all sit on top of the salary, and none of them is deductible for personal household work. This post builds the full 2026 cost of a household employee, line by line, and lists the records that support each number. It does not cover whether to hire, what to pay, or how to measure the value of the work. Those are the family's decisions. It covers what the tax and payroll side adds, so the budget and the return agree. Line 1: cash wages Start with gross cash wages, including overtime and any bonuses. Bonuses, holiday gifts of cash or gift cards, and payments for extra events are all wages. If the household agreed to a "net" salary (what the employee takes home), the gross wage is higher, ...

The role that used to be called a butler has grown. A senior household employee today may run the homes, manage vendors, book travel, handle the family's calendar, pay bills, and also schedule meetings for the business the family owns. That mix is practical. For tax purposes it raises a question that has to be answered on paper: which employer pays this person, and which return deducts the wages? This post covers how to handle a household employee whose duties are split between personal and business work, what the IRS looks for, and the records that support the split. It is not advice on how to define the job or what to pay, and it is not employment law advice. It is the set of decisions your preparer and payroll provider need settled. Why the split matters Wages for personal household work are not deductible. Wages for work done for a trade or business generally are. That difference creates pressure to run more of the person's pay through the business than the work support...

A household that hires a household manager, house manager, or personal assistant usually thinks of it as a staffing decision. The tax system treats it as something else: the household has become an employer. That brings federal and state payroll obligations, a new schedule on the individual return, and records that have to hold up if the IRS or a state unemployment agency asks. This post covers what changes for tax purposes when a household hires a manager or other domestic employee, the 2026 thresholds, and the records to set up before the first paycheck. It is not hiring advice, it does not cover how to find or evaluate a candidate, and it is not employment law advice. Wage and hour rules, contracts, and immigration questions belong to an employment attorney. Is the person your employee? For tax purposes, a worker is your household employee if you control not only what work is done but how it is done. IRS Publication 926 is the guide. A house manager who works on your schedule, a...

Entities that once had a clear job tend to outlive it. A management company formed to run a family's finances, an LLC that employed household staff, or a holding company for a business that was sold can keep filing returns, paying state fees, and running payroll accounts long after anyone uses them. When the family decides to close one, merge it into another, or hand the work to an outside firm, the tax side has its own sequence, and skipping a step leaves a filing obligation open. This post covers the federal and state filings involved in closing or consolidating an office or management entity, how the move affects payroll and staff, and the records to keep afterward. It does not advise on whether to close, merge, or keep an entity. That is the family's decision with counsel. This is what the returns and payroll accounts need once the decision is made. Start with the inventory Before anything is closed, list what the entity actually has: Its legal name, EIN, state of for...

Households with complex finances eventually decide which tasks to handle with their own staff and which to hand to outside firms: bookkeeping, bill pay, payroll for household employees, tax preparation, investment reporting, insurance review. The choice is about cost and control, and the family makes it. The tax side is simpler than it looks: some responsibilities transfer with the task and some never do. A family can outsource household payroll and still be the employer liable for the tax. It can hire a bookkeeper and still be the person who signs the return under penalty of perjury. This post covers the tax consequences of keeping functions in-house or outsourcing them: who stays responsible, what records each choice produces, and what the household should require from any provider. It does not recommend in-house staff or any provider, and it is not legal or investment advice. What never transfers Responsibility for the return. The taxpayer signs the return under penalty of pe...

A family deciding between candidates for a senior financial role, such as a household chief financial officer, controller, or office lead, will usually score them on competence, fit, and integrity. That evaluation belongs to the family and its advisors. But there is a second scorecard worth running before an offer goes out: a tax and payroll checklist for the role itself. Senior hires often handle the household's tax records, payments, and IRS correspondence. The terms of the job decide who files what, who can sign, and who is responsible if a payroll deposit is missed. This post is a pre-offer tax and payroll checklist for a senior household or office hire, and a short list of tax-related questions a family can ask any candidate about how they handle tax records. It does not evaluate candidates, it is not hiring or employment law advice, and it does not recommend any person or firm. Part one: the role checklist Score each item before the offer. The answers go to your preparer...

When a household or a family office hires its first senior person, such as a chief financial officer, a controller, or a lead administrator, most of the attention goes to the search and the interview. The tax side gets settled in a hurry after the offer is accepted, and that is when the mistakes happen. The person is paid through the wrong entity, treated as a contractor when they are an employee, given a bonus structure nobody has checked against the deferred compensation rules, or set up in a state where the employer has no payroll account. Each of these lands on a return. This post covers the payroll, worker classification, and bookkeeping questions to settle before a senior hire starts. It is not hiring advice, it does not cover how to find or evaluate a candidate, and it is not employment law advice. It is the list your preparer and payroll provider need answered. Question one: who is the employer? Decide which legal entity employs the person. Options include an office LLC or...

Advisors and articles often cite asset thresholds for when a family should consider a dedicated office: $100 million, $250 million, $500 million. Those numbers are about cost and staffing, and they are outside what an Enrolled Agent advises on. What a preparer can see is a different set of thresholds: the points where the household's filing obligations, payroll, entity count, and state footprint become too much to manage informally. Those thresholds arrive much earlier than any asset figure, and they show up on the returns first. This post covers the tax and filing signs that a household's administration has outgrown informal handling, and an honest test of whether the records are ready for any change in structure. It is not advice on whether to form a family office, and it does not recommend a structure. It is a way to read your own returns for signs of strain. Thresholds the return shows Number of returns Count every federal and state return the household and its entiti...