We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I used Gary’s services to file my 2012 income tax return. This was my first year having an accountant do my return, as I have always done it myself using TurboTax. However, this year I had cancelled debt from my old primary residence which I was forced to convert to a rental property after relocating out of state.

While it didn’t cost me anything to do the short sale, the income tax consequence from the cancelled debt, roughly $50,000 in my case, was enough to move me from the 15% tax bracket to the 25% tax bracket.  Needless to say, I was concerned about that.

Finances were already tight and my husband and I are expecting our first child this fall. So the possibility of owing income tax was stressing me out. However, Gary was great at relieving my fears.

He is extremely knowledgeable, answered all my questions and was very thorough. I knew I was in good hands. He kept in constant contact with me throughout the process, keeping me updated on the progress of my return and letting me know what paperwork he needed to complete my filing.

In my mind, best case scenario would have been to not owe any taxes. Second best would be to only owe a little. Well, you can imagine my surprise and delight when Gary told me I was actually due a refund of a little over $2,700.00!

To top it all off, I found Gary’s fee for service to be fair, competitive and affordable; especially given the complexity of this type of return. I am so glad I did not try and go it alone this year. I am extremely pleased with Gary’s service and would recommend him highly to anyone, in fact I already have. If you have cancelled debt from a short sale or foreclosure, don’t freak out. Take a deep breath and call or email Gary. I am grateful I did.

Angie Falke of Holiday, FL

Free Consult

Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Schedule H CPA explains the Nanny Tax and provides an example

Even Schedule H CPAs call it the Nanny Tax! If you paid more than $1700 to a household employee , or paid them more than $1000 of gross wages in any calendar quarter, you need to file Schedule H with your IRS Form 1040. Schedule H substitutes for the usual employer IRS tax forms. It sounds strange that Form 1040 calculates more than income taxes. But the IRS just tries to make compliance easier for household employers. It may not seem like it, but Schedule H beats becoming a traditional employer.

Household employees may include:

  • Babysitters
  • Caretakers
  • Cleaning people
  • Domestic workers
  • Drivers
  • Health aides
  • Housekeepers
  • Maids
  • Nannies
  • Private nurses
  • Yard workers

Key differences between Household Workers and Subcontractors

I think any Schedule H CPA would agree that folks generally try to classify household workers as subcontractors. Why? It shifts all the taxes and associated compliance hassles to the worker. The main two issues?

  • Do you control the HOW the work is done?
  • Does the worker use YOUR tools and supplies?

If either answer is yes, prepare Schedule H. And don’t issue a Form 1099-MISC.

Remember, Schedule H and the Nanny tax are closely linked to immigration status. You’re expected to know if your worker is legal to work in the US!

Nanny Tax Mechanics

Like any employer, you can withhold the employee’s share of employment taxes from their gross pay: a total of 5.65% in 2012 – 4.2% for Social Security and 1.45% for Medicare. The employee may request that you with hold federal income tax, but you are not required to do so.

Generally, folks pay a straight hourly wage or salary, and then pay all/both the employee’s 5.65% AND the employer’s matching 7.65% taxes themselves, on Schedule H during Form 1040 tax preparation. The employer also incurs Federal Unemployment Tax (FUTA) of .08% on the first $7000 of gross wages during the calendar year.

Nanny Tax Expense Example

So, if you paid $10,000 to a household employee in 2012, the tax due on Schedule H of Form 1040 would be $1386: $565 for employee’s employment tax, $765 for employer’s employment tax and $56 for federal unemployment tax. Remember you could have withheld the employee’s employment taxes of $565 from their gross pay.

We’re a CPA firm with a virtual office to serve long distance clients. Schedule H isn’t that complex, but we’re happy to prepare it as part of your overall tax preparation. We offer a free phone consult; just call (910) 399-2705.

 

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