Hiring Household Employees Legally Is Ridiculously Complicated

I believe in paying household workers, like nannies, on the books. Paying them off the books, like other forms of tax evasion, seems to me like stealing from the public. It feels morally similar to breaking into a library and taking cash from the register.

Being paid on the books also has several benefits for the worker. A history of income will help them qualify for a loan and ensure that they get financial protections, like social security and unemployment benefits.

This isn't cheap though. I saw articles advocating for it that said it'd cost about 10% more, and I have no idea how they got that. In my case, my wife and I are going to be spending about 30% more than we would have, once we tally up federal tax, state tax, social security, medicare, unemployment, disability, and workers comp (we "grossed up": increased the gross pay so the net is our nanny's usual rate).

I wish this number was lower. Some of it seems pretty bizarre, like paying about $740 a year for workers comp (the rates are state regulated). How much risk is there really for a nanny to severely injure themselves while nannying? But qualitatively, I'm ok with spending extra money on this. "Taxes are what we pay for civilized society."

But holy shit, the federal government, and especially New York State, make it a nightmare to deal with! It's this totally frustrating inefficient omg-so-many-steps-this-is-insane process. Many of the forms don't even perfectly fit the process of hiring a nanny. According to http://www.parkslopeparents.com/Nanny-101/babysitter-on-the-books-52435.html and my own research, people need to do something [1] like:

When hiring:

1. Get an EIN
2. Verify work eligibility
3. Get a W4 from the employee
4. Register with NYS as an employer
5. Buy disability and workers comp insurance
6. Notify NYS of the hire
7. Figure out payroll (gross pay - ss, medicare, fed & state unemployment and/or disability tax, income tax withholding. this assumes pay is the same each week. if you eg want to pay the nanny more one week to stay late one night, you've got to do this again.)
8. Annual pay notice (get signed, keep for 6 yrs)

Weekly:

1. Pay employee (keep record for 7 yrs)

Quarterly:

1. NYS income tax withholding
2. NYS unemployment tax
3. social security, medicare, and federal withholding filing

Annually:

1. Disability and workers comp insurance
2. Annual pay notice (get signed, keep for 6 yrs)
3. Schedule H with 1040 (SS, medicare, federal unemployment taxes)
4. State unemployment taxes (is there a state equivalent to schedule H?)
5. W2 to employee
6. W2 to social security admin
7. W3 to social security admin

And then people in government get upset when everyone breaks the law...


[1] This list may not be 100% right; please don't use it for anything serious without checking its accuracy.

Smarter Grocery Shopping

My latest little project is Shopping Brain. It's a mobile (web) app to make frugal grocery shopping easy, based on Mr Money Mustache's strategies for shopping.

It's very new and very rough. I recommend waiting until I iron out a few more kinks before you use it but if you're feeling adventurous and want to give it a shot, I'd love to hear what you think! You can see my to do list here.

I reused some of the code and architecture from my to do list program, Do Me, although I got to fix all the things I did wrong there :-) Since I had a pretty good handle on angular.js before starting this, the code is very nice and was a breeze to write!

It's open source for maximum goodness.

Enjoy!

Are Big Cars Safer Than Small Cars?

I just did some investigating and the short answer seems to be "generally, yes."

My findings are at http://www.benamy.info/correct-opinions/safe-cars.

Adding a second shower head to your shower

I just wrote a new guide: Installing a Second Shower Head in Your Shower

You are 8 times more likely to be killed by a police officer than by a terrorist

I just had to link to this great article. It's backed up by real data and someone who's actually using their brain.

The article includes the quote:
“Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death”.
- Adolph Hitler

Our government is certainly following that advice!

Contextual Bandits

I read http://synference.blogspot.com/2013/12/multi-armed-contextual-bandits.html and thought I could write a more concise version. I also had some questions.

Intro

A/b testing is great! Wikipedia uses it every year to pick the best fundraising banner and a/b testing makes them millions of dollars more.

The contextual bandits algorithm can do even better.

2 improvements over traditional a/b testing

1. The algorithm doesn't have to have a single winner. It will try to show the most effective version for each user.
2. The algorithm automatically optimizes. If it has a good guess at which version a user will prefer, it uses that. If not, it picks randomly to collect more data.

How to Use It

There's a paid service at http://www.synference.com/ with a free beta.

My Questions After Reading

1. How do we generate the versions to use for contextual bandits?
2. Does the algorithm support adding new versions later?
3. Does the algorithm support removing poorly performing versions?

My latest little project: backup.js

I just created and released backup.js. It's a library to make it easy for html apps to make backups in local storage.

I've been working on and off on my own to do list app. It makes periodic backups of the data in case I accidentally erase something (there's no undo) and in case there's a bug which clobbers data. The backup functionality has been very simple: it makes copies of data in local storage but never cleans them up. Eventually it hits the browser's local storage space limit and I have to dig in and delete some old backups to make the app start working again.

I finally got sick of this situation and decided to implement backups in a smarter way. backup.js is a standalone library to do this. I easily plugged it into my to do list app, but it's perfectly usable for any future projects of mine or anyone else who wants to use it.

It's been a fun little side project for a few days!