How would you do your taxes, if you don't work a regular job?

Question

When it comes to things like this, I'm completely ignorant.

Say someone is a nanny. How would they pay their taxes and all, so they aren't working "off the books"?

I want to be a nanny, but I don't want to be getting paid illegally and end up in trouble for it. I know sometimes the family you work for will report you on their taxes, but if they don't do that can you still report their payment for your own? Do you still have to give the government a certain amount each payday, or do you just give it all to them during tax season?

(Really, I know NOTHING about taxes... I'm only 18 so they are new for me.)

Answer 1

You keep records of you income.

You can pay quarterly estimate taxes. You estimate your income and tax liability.

You might want to check the IRS site and read thru some of the publications dealing with self employment.

Answer 2

If your employer pays you $600 per three months - seems likely, doesn't it - they have to report your earnings, and withhold taxes. They also pay social security taxes on you (in addition to what you pay.)

You can be a self-employed caregiver, although it's hard to get away with it if you are a nanny, because the parent has too much control over where and how you perform your duties. A self-employed person pays estimated taxes every quarter, and ends up paying about double the social security taxes. When tax season arrives, you make a fourth payment of taxes, equal to what you owe, minus what you paid in estimated taxes. If you paid too little in estimated taxes, there is a penalty, because you're supposed to pay taxes as you earn the income.

You need to phone the IRS, and ask for "Publication 17 Your Federal Income Tax", "Publication 505 Tax Withholding and Estimated Tax" and "Publication 926 Household Employer's Tax Guide" Those are all *free*, and the call to request them is toll-free as well - 1-800-IRS-FORM, if I remember correctly.

Answer 3

If a family hires you to come to their home and be a nanny for their child(ren), you are an employee. Your employer is supposed to withhold the necessary taxes.

If you are seeking a job as a nanny, I recommend that you only consider a family who is going to properly report taxes. They will give you a tax document (a W-2), and from this it it very easy to file a tax return. Your taxes will have already been paid and you will owe little or no additional tax.

Some families will not properly treat wages paid to their domestic employee, and will not withhold taxes. This forces you to file as self-employed, do a more complicated tax return, and pay additional Social Security and Medicare taxes. You would do all this when you file your tax return.

In addition, if you are not treated as an employee, you will not be eligible for state unemployment or workers compensation should you lose your job or become injured on the job.

Answer 4

You have to send 4 payments per year. They are in April, June, September, and January. They are due the first business day after the 14th. This is usually the 15th, but sometimes later if the 15th is a weekend or holiday. Sometimes it is extended more for unusual reasons (such as the September 2001 deadline, due to terrorist attacks on the 11th). Use Form 1040-ES to determine the amount to pay.

Answer 5

If you're working as a nanny, your employer is required to withold Social Security and Medicare taxes from your pay. They can also withold income tax but it's optional. If they don't, you must make quarterly estimated payments using Form 1040-ES.

Answer 6

You should seek the guidance of a tax professional, you can still get paid cash and pay your taxes so that you do not get into trouble. But only someone who knows tax laws can help u!