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You nailed it. I also add that the government (probably varies allot by state) makes it very difficult to hire employees. My wife and I hired a nanny a few years ago, doing everything by the book regarding taxes and insurance. Still got fined twice for some infantile amount owed on something, even after three calls to the state office resulted in three separate amounts of what we owed. I'll NEVER take on an employee again. The game is rigged to favor those who can afford the lawyers and accountants.

1. Was the fine large enough to matter?

2. You can hire an "nanny tax" accountant for ~$500 a year (maybe was more expensive a few years ago)

1) No, it was a fine for an amount owed under $100, which we paid, but then received a bill for another fine, since it now said we owed $150. Three calls to separate state offices resulted in three amounts owed. We just picked the highest of the 3 and paid the damn thing. This is in KS which is supposed to be "business friendly". I should have just done as the politicians and hired an illegal alien under-the-table.

2) Yes, but it's the principle. I have to hire an accountant (zero added value for me) just to hire someone who actually does provide value to me. It shouldn't be this complicated. It was easier setting up an LLC, and if we could do that, we should not need an accountant for a nanny; guess not.

Sounds like a great business opportunity for a SaaS app that nails the details of nanny accounting in all fifty states.

No sh!t it is! If you can develop that for the tax codes in all 50 states, you'd have a winner! I think it's impossible to do though, unless you are Quicken.

But you could get 2/3rds of the US population operating in just 15 states. 1/3rd in just 4 states.

1/3 of the population and likely 2/3 or 3/4 of the regulations. The big states have WAY more regulations than the smaller ones.

Yes, good point.

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