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Your nanny may ask you to withhold Federal tax from her pay but you are not required to do so. Your nanny may make estimated tax payments throughout the year if she thinks she will have tax liability at the end of the year. If she pays more throughout the year than what she owes, she will be eligible for a refund of the overpayment.

You probably need to be paying the employer's share, and withholding the employee's share of Social Security tax and Medicare tax. Check IRS Publication 926 for more information:
http://www.irs.gov/publications/p926/ar02.html#d0e298

From IRS Publication 505:
"Household workers. If you are a household worker, you can ask your employer to withhold income tax from your pay. A household worker is an employee who performs household work in a private home..."
"Tax is withheld only if you want it withheld and your employer agrees to withhold it. If you do not have enough income tax withheld, you may have to pay estimated tax, as discussed in chapter 2."

The cost of paying your nanny can be deducted as work related expenses for you if her services caring for a qualifying dependent allow you to work.

Ordinarily you need an EIN number.
Your nanny should complete Form I-9.
You should be reporting the wages you pay on Schedule H
Check IRS Publication 926 for record keeping, and other responsiblities you have as an employer.

However, your nanny's personal income tax return is not your responsibility.

2007-05-12 20:14:34 · answer #1 · answered by AngeloElectro 6 · 0 0

Determining if a person is required to file a Federal Tax Return needs several pieces of information. Generally speaking, for a person that works at jobs in the United State which receive W-2's as an employee and is a citizen of United States, it is simple to figure out whether they are required to file or not. You will need to know:

1) Filing Status - is the person single, married filing jointly, married filing separately, head of household, or qualifying widower?
2) How much income did they make?
3) What is the standard deduction for the tax year in question?
4) What is the personal exemption amount for the tax year in question?

If they're earned income is over the standard deduction plus the personal exemption amount they are required to file. This varies from year to year so it depends on which tax year you are referring to. Check out publication 17 from the IRS website http://www.irs.gov/. It lists all special rules and exceptions beginning on the first page of Part I. Some additional reading may be necessary, depending on the circumstances.

2007-05-11 23:43:35 · answer #2 · answered by eeb 3 · 0 0

If she's working in your home under your direction, which would be typical for a nanny, you should be paying the employer's share of social security and medicare and withholding taxes from her paycheck.

2007-05-11 23:39:36 · answer #3 · answered by Judy 7 · 2 0

You would not have to file taxes for her. If she's here legally, WHICH SHE SHOULD BE, she should have her own legitimate Social Security Number and be filing her own taxes. Try asking the IRS at www.irs.gov. Search their site for your answer because I don't know how much income a person has to make to file income taxes.

2007-05-11 22:13:36 · answer #4 · answered by Anonymous · 0 1

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