The Dreaded Tax Issue

      Taxes can be an issue for both nannies and employers, as many employers do not understand the legalities and realities of paying taxes while employing a nanny. Families see us as independent contractors, not realizing we are their employee. Should we, as nannies apply for a loan or line of credit, how does a lender or credit underwriter verify income if taxes aren't deducted from a paycheck? In other words, if a family has a full time nanny and taxes aren't paid in, how does that nanny obtain a loan without her income being verified? It all starts with a social security number, as a nanny agency explained to me. I read somewhere that if a nanny makes over $3K a year, the family is responsible for deducting all federal and state withholdings, and that Breedlove is an excellent resource to make it happen. Do any nannies out there have experience with new jobs and explaining to the employer it is a legal responsibility to withhold all taxes? Anyone employed by a family who uses or has used Breedlove in the past? This position by my calculations (mind you I am signing my work agreement this weekend) would pay $660-710 per month (it's part time), and over the course of a year would be $7900-8450/year. As a nanny, I know they have to pay taxes, and I am unsure how to bring this up to M and DB.

PS: I was the OP of the submission that appeared a few weeks concerning being intimidating to prospective families. Many of you responded with helpful advice, and I appreciate the constructive criticism. A lot of you said relax, speak from the heart and do not bring up other nannies. I relaxed and spoke from the heart. MB mentioned she had other interviews before she left, and later that evening, I got the email asking me a few more questions, along with the fact that she was very much interested. The next evening, I got the job offer. Thank you everyone for the suggestions and help! All of you are loved on the ISYN board

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paulette Encinas said...

I remember your other post. You had lost of qualifications. Why is the income so LOW??????

OP said...

It's a part time, every other weekend job.

paulette Encinas said...

Oh right. Sorry. Good luck getting the employers to pay taxes then.

Moniker said...

Yes, I have used Breedlove before. Very easy set up. Once done I was paid weekly via direct deposit. They handle all the necessary deductions and you just get your net money. Worry free. Oh, and they send you your w2 form home just in time for tax return season.

SO, Congratulations on your new position.

About the other part of your post. I discuss taxes while discussing my rate. Before I accept a position.
Yes, the family legally is required to put you on payroll but you know how that is... since it's "just" a weekend job they might not want to. Some families think there is more paper work for them then it's worth it.

Well, i worked for a family on the side for a year and then asked them to put me on payroll. They weren't very pleased, but in order to keep me they had to tolerate my requirement.

Good luck!

Alice said...

I have no experience with this but have had families withhold the taxes they're legally required to pay in, and inform me of what I should be withholding too.

I'm happy to hear that you were able to land something! :)