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4 Common Fixes for a Nanny’s Rejected e-Filed Federal Tax Return

Posted by HomeWork Solutions on 1/27/15 8:00 AM

1. A typographical error. 

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Topics: nanny w-2 form, nanny income tax

Nannies, What Do You Do When You Owe the IRS More Tax Than You Have?

Posted by Kathleen Webb on 4/14/14 1:59 PM
April 15 is the deadline for income tax filings for a nanny, senior caregiver or housekeeper in the United States.
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Topics: nanny income tax, household paycheck calculator

Accountants' Value Transcends Billable Hours

Posted by Kathleen Webb on 8/1/13 9:29 AM

How pleased were we to read the latest article in the New York Times by economic reporter Adam Davidson, "What’s an Idea Worth?".

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Topics: elder care, nanny income tax, accountants, nanny tax, household payroll tax

Formulario W-2. ¿Qué hacer si aún no lo has recibido?

Posted by HomeWork Solutions on 1/28/13 5:32 PM

Q. ¿La fecha límite para recibir tu W-2 ha pasado y aún no la has recibido? ¿Qué hacer?

El IRS requiere que los empleadores entreguen el Formulario W-2 a sus empleados a más tardar el 31 de enero.  Recomienda a los empleados, así mismo, que si éste no ha sido recibido dentro de la fecha límite, se de un plazo adicional hasta el 15 de febrero para presentar su reclamo ante el IRS.  Primero debe contactar a su empleador para confirmar que tiene la dirección actual, en caso se haya mudado en el último año.

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Topics: nanny income tax

Nanny Payroll Update – San Jose (California) Minimum Wage Increase

Posted by Vanessa Vidal on 11/13/12 5:03 PM

San Jose’s Measure D, which will increase the current city’s minimum wage from $8 to $10 per hour effective March 2013, passed with overwhelming voter support. 

San Jose is now one of the two cities in California whose minimum wage has gone up independently of the state's.  San Francisco has enforced its own minimum wage for many years.  There are only a handful of other cities nationwide that set their own minimum wages: Washington, D.C., Santa Fe and Albuquerque, N.M.

Household employers in San Jose whose pay their employees minimum wage need to adjust their salary to reflect this new rate in March 2013.

Stay tuned for more updates from The Nanny Tax Experts.

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Topics: nanny income tax, nanny payroll tax, calculate nanny payroll tax, household payroll tax, california household employment


Posted by Vanessa Vidal on 11/7/12 5:44 PM

IRS and states recently affected by Hurricane Sandy will extend tax deadlines and waive some penalties to tax payers affected by this natural disaster.

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Topics: nanny income tax, nanny payroll tax, nanny tax, household payroll tax, nanny tax compliance

Top Nanny Payroll Questions

Posted by HomeWork Solutions on 11/7/11 8:30 AM

We have helped families with their nanny payroll and tax issues for nearly 20 years. Some family and nanny questions are timeless. Here is a little of what we hear. Remember, there are very thorough answers to many common questions in our online FAQ.

1. I had a serious misunderstanding with my family and left my nanny job without notice. I received a text from my employer, a lawyer, asking for my mailing address so she could "1099" me. Isn't she supposed to give me a W-2? What does this mean?

Nannies are employees of the families that they work for and the wages nannies receive are subject to Federal and State employment taxes. These employment taxes are paid to the government by the employer, and the employer is entitled to deduct your portion from your paycheck. If the employer does not deduct, THEY remain responsible for paying. YOU are responsible for your income taxes.

Your employer is legally obligated to provide you a W-2 form no later than January 31, 2012 for your 2011 employment.

2. I agreed to work for a family for cash - under the table. We agreed on a rate knowing that no taxes would be deducted or reported. My boss has been collecting money from a special tax free account, and just learned she has to pay taxes and report my income. What does this mean to me?

When you agree to work under the table both you and your employer are agreeing to violate tax law, and there can be consequences to both of you if you are caught. Fortunately for you, it sounds like this can be rectified in a timely manner assuming you are referring to 2011 wages.

Your employer will need to give you a W-2 that documents the wages you were paid. She will file this with the Social Security Administration. She will have to pay the IRS the Social Security and Medicare taxes on your wage, and will likely need to pay unemployment taxes too. Your W-2 will show that NO income tax was deducted from your wage; this is legal in household employment. You will need to complete an annual income tax return to calculate the amount of tax due, if any, and make your payment to the IRS. Don't ignore the W-2 - the IRS will know you received one and will catch up with you sooner, rather than later. Enforcement is always stepped up when there are budget deficits and government programs awaiting funding.

3. I hired a foreign nanny who is here legally on a visa but she doesn't have a Social Security Card. What do we do about the taxes?
There are two possible scenarios at play here. The first is that your nanny is both legally present and legally authorized to work in the U.S. and is simply awaiting her SSN. If that is the case, the situation will resolve in about 6 - 8 weeks as that is the typical turn around time for a Social Security Number application. You need to report all income and pay all taxes from the date she starts, whether she has the number yet or not. Depending on your state taxing authority, you may incur a small penalty on your first filing if this number is not included.

The second possible scenario is that your nanny is legally present (has a visa) but does not have authorization to work in the U.S. By hiring her you both are in violation of U.S. law. You the employer are only permitted to hire citizens, permanent residents, or legal non-immigrants with a valid work visa. She too is violating her visa. This is a somewhat common occurrence with foreign students admitted to the U.S. to pursue university studies. You will have all of the employment tax obligations of an employer - the IRS does not care if your nanny is legal to work or not. Your nanny will file a W-7 application for a Individual Taxpayer ID Number (ITIN) with her first tax return (usually a 1040NR) and be issued an identifying number by the IRS. Therefore, for the first year all of your filings will be missing a SSN/ITIN, but in future year filings you will be able to utilize her ITIN for tax payment purposes.

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Topics: nanny income tax, nanny payroll tax, nanny taxes, nanny independent contractor

A Nanny's Plea: Help! I Didn't Get My W-2

Posted by Kathy Webb on 2/7/11 8:18 AM
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Topics: nanny w-2 form, nanny income tax, nanny tax

Is your nanny married? Do you deduct income taxes?

Posted by HomeWork Solutions on 1/5/10 1:46 PM

If you answered yes to both of these questions, PLEASE recalculate her paycheck deductions using the 2010 rates ASAP.

Tax_Help.jpgFor a married nanny earning $18,000 a year, her Federal income tax withholding could have doubled. If she earns $22,000 it could go up by a third!

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Topics: nanny income tax

IRS Warning: Check Your Withholding Status

Posted by HomeWork Solutions on 7/13/09 1:56 PM


Nannies who are married, in a nanny share, or have more than one job take note:

The Internal Revenue Service is reminding individual taxpayers to check their 2009 federal income tax withholding levels to ensure there are no surprises when filing returns next spring. Because the Making Work Pay credit lowered tax withholding rates this year for 120 million American households, taxpayers should ensure that enough tax is withheld if they are among these groups: multiple job holders, families with both spouses working, workers who can be claimed as dependents by other taxpayers, and pensioners. Failure to adjust withholding could result in taxes owed or smaller refunds, IRS said.

If a nanny is married and both spouses work and both spouses had their withholding tax adjusted, they are being credited for 150% of the available credit - and may be surprised to owe several hundred dollars at the end of the year. If you work two or more jobs and have withholding from each, you may be being under-withheld because each job treats your withholding tax calculation as if you are working only for them. Nannies in a nanny share have to be particularly vigilant that both jobs are taking into account your TOTAL income, not just the portion they pay individually, when calculating your withholding.

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Topics: nanny income tax

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