So you think you have no reason to learn Microsoft® Money? Think again. You need to pay wage withholding taxes for every household employee. Nannies. Gardeners. Handymen. Pet sitters. Cleaners.

According to the Internal Revenue Service, a household employee is anyone who does work in or around your home and is not an independent contractor.

Household employees are people who work for you on a regular basis. They include: babysitters, nannies, health aides, private nurses, housekeepers, maids, caretakers, yard workers and other domestic workers.

Learn Microsoft Money to keep track of how much you pay your household employees. If you pay any of them $1,500 or more during the year, you must pay both state and federal payroll withholding taxes. The three withholding and employer taxes that must be paid under the umbrella of nanny taxes are:

  • Federal Payroll Withholding Taxes
  • Social Security
  • Medicare

Additionally, you also may have to pay state unemployment and disability taxes. Learn Microsoft Money and let the software help you figure it out.

It is important for you to determine in advance which taxes you must withhold from your household employee’s pay and which taxes you must pay as the employer. Do yourself a favor. Learn Microsoft Money. The software makes paying wage withholding and employer taxes easy.

When you learn Microsoft Money, you’ll see that it has the answers built into its templates. As you learn Microsoft Money, you’ll start to set up your household to operate as a small business.

Before using the program, learn Microsoft Money by watching a computer training video or signing up for online software training. These computer-based tutorials will show you how to set aside the payroll withholdings and employer taxes to pay to the state and IRS on a monthly or quarterly basis using Microsoft Money.

For each of the independent contractors you hire throughout the year, you will need to have name, address, phone and social security numbers so you can file a 1099 form for each at tax time. These contractors must report as income all monies you paid them during the year. When you learn Microsoft Money, keeping track of this information is a breeze.

Setting up a payroll system within your household budget can be a daunting task. This task will be much easier when you learn Microsoft Money.

It’s easy to learn Microsoft Money by using computer training videos or online software training available from Video Professor and other such companies. Usually, the computer training videos are sent to the customer via snail mail on a free trial basis. The same companies that offer computer training videos often also offer online software training.

If you’d prefer to set up your household budget and payroll system using another software, such as Quicken® or QuickBooks®, it’s best to do so with Excel® integration. You can get online software training and computer training videos for these software programs from Microsoft, too.