I'm interested in other folks experiences with handling taxes for their nanny? I know there are payroll and nanny pay and softwares out there that can assist. Or should we try and do this on our own or use a service? Where do we begin if we handle on our own?
2007-10-31 02:27:21 · 5 answers · asked by dam8867 1 in Business & Finance ➔ Taxes ➔ United States
The CPA who does your taxes can deal with the reporting requirements quite easily. It is not difficult if you know what you are doing. Remember you will also have state tax requirements (unless you live in a state with no income tax). As you have considered it necessary to hire a nanny, do you also think you have the time to comply with additional tax obligations?
2007-10-31 02:53:05 · answer #1 · answered by skip 6 · 0⤊ 0⤋
I am a nanny and I have had 2 different employers, the 1st ones did the taxes themselves and it was a little more complex, the people I work for now use NannyPay and it is so much easier. I would recommend nanny pay. Good luck with the new member of your family.
2007-10-31 13:32:35 · answer #2 · answered by UV VIxen 3 · 0⤊ 0⤋
Personally......If I were in your situation, I would hire a Nanny Service.....but that is just me....
If you hire a nanny directly, you are considered an "employer" with all the responsibilities that come with it. You would have to apply for Federal and State ID numbers so you could withhold taxes from the nanny's pay. You would also be responsible for paying the employer's share of social security and medicare as well as state and federal unemployment taxes.
Go to IRS.gov and search for "Household Employee".
2007-10-31 09:43:34 · answer #3 · answered by Wayne Z 7 · 1⤊ 0⤋
Simply get the booklet from the IRS. It can be done easily with one or two employees. Learn the rules, and the amounts you must withhold as well as the times and dates for making these withholding payments to the US Govt. (Be sure to make these on time, there are penalties)
Then, simply keep a ledger. In it you show the hours worked, the pay earned, the amounts taken out etc. Totals can be kept for each month and for the year. If you do this on a computer (like with Excel) you can easily print out a monthly statement for your employee.
2007-10-31 09:36:17 · answer #4 · answered by Marvinator 7 · 2⤊ 0⤋
First you should read IRS Publication 926: Household Employer's Tax Guide. You will need to read only 10 pages.
Then go through schedule H (Form 1040) and its instructions. You should be ready to handle on your own.
http://www.irs.gov
2007-10-31 12:15:58 · answer #5 · answered by MukatA 6 · 0⤊ 0⤋