Nanny Tax Question

Hi, had some questions about nanny taxes. What has your all's experience been? Need to do this for the first time, so what information will my employer need from me? Any forms I need to fill out? Basically I just need to figure bout what my part is to get paid on the books!


Anonymous said...

You should have a contract in place stating the average number of hours, days, etc that you work. Your contract should also cover any vacation time, paid or unpaid. You should have signed a W4 at the beginning of your contract, any state tax forms, an I-9 and submitted a copy of your driver's license, social security # or card and your birth certificate. Furthermore, if you're not a salaried household employee, then you need get paid overtime for any hours worked over 40 throughout the week (check on state guidelines, I know California has different overtime rules).

Now, you should be receiving a regular paycheck (weekly, monthly, bi-monthly, etc...whatever you negotiate) with state and federal taxes taken out. If you do not, your employer is not following the rules. There are several resources out there in order for your employer to pay you properly: homepay, local payroll companies, Paychex, quickbooks (If they are savvy...unless they are very well versed, many mistakes can be made here. I use Paychex for my agency.). At the end of the year, you should receive a W2 that you may use to file your federal and state income taxes. You should receive this by the end of January.

As a side note, you should also consider who is going to cover your worker's compensation insurance (your employer really should unless you are a 1099 contractor...different story altogether) and think about having some added general liability (maybe tacked onto your homeowners or renters ins) as well as beefed up vehicle insurance (for transporting for work). All of these things cost more, but makes you that much more marketable. If you work with an agency, they should either #1) help you navigate all of this and provide contracts for your use OR #2) take care of all of this for you.

I own an agency and I can tell you it's tough out there to go it on your own legitimately. Many do and I have great respect for them and the families that are dedicated to doing the right thing. Good luck out there and chances are if you are asking, you are on the right road. All the best to you!

Anonymous said...

Just be careful that they don't have a change of heart 6 or 8 month into the year then decide they want Nanny to claim taxes! It sucks because we all got major penalized because I also worked the year before for them so I had 2 years of back tax and penalties. At the time I worked for 2 families at the same time family 1 burned me by pulling this stunt 3/4 through the 2nd year of employment. Family 2 was so awesome I'll forever be in their debt they stepped up to the plate helped me figure it all out and they also helped me pay some of the back taxes... They are awesome! Yes, this was a lesson learned be paid on the books and have a contract that states everything!

Anonymous said...

OP- Okay, thank you! I think I have it figured out now. My nanny family has been really good with getting everything figured out to pay me on the books and will be giving me a W2 at the end of the year.