confused about taxes?

Question

I am a nanny and i don not get taxes taken out of my checks,would i be ahead if i file and pay into the irs? I have a daughter i can claim and get the child tax credit? I make about 10,000.00 a year.

Answer 1

Hi Neener!!! I think that you should be able to get a tax refund. I'll do some research for you, ok?

Answer 2

Most definitely file. You will get the Earned Income Credit (I assume you are filing Single or Head of Household).

Your income is too low to get the Child Tax Credit.

Depending on whether the family you work with gives you a W-2 or not, you would file as an employee or independent contractor.

Answer 3

If you are working in the home of the people you are providing service for, they are required to withhold Social Security and Medicare taxes from you wages.

Tell them to hit the IRS website and google "Nanny Tax" for full information.

You will need to file a tax return. With your limited income and a child you will not have any income tax liability. You may also qualify for the Earned Income Tax Credit. Since you won't have any tax liability, there will be no benefit from the Child Tax Credit as that credit is not refundable.

The issue on your Social Security and Medicare taxes IS a problem, however. You need to discuss this with your employer and they MUST withhold these taxes unless they decide to pay them for you. They need to file Schedule H with their return to account for your SS and Med taxes. Here's a link to IRS Pub 926 on that issue: http://www.irs.gov/publications/p926/index.html

Answer 4

Yes you would be ahead. Even though you don't get taxes taken out of your check...you should still receive a 1099 from your employer. If you only made 10,000 then you should get earned income credit. You would still receive a tax refund check.