nanny tax question

[Anonymous]

I paid three different women to take care of by baby this year, each not for very long. They made $1045, $1830 and $395.

I know there's an $1800 threshold, so i'll have to report income on the middle one, but is it right that i don't have to report on the other two?

I've paid nanny taxes in the past, but i find it all super tricky. i know i should hire someone, but anyway, here i am. thanks for the help.

[Anonymous]

You have to pay on amounts under $1800, if you paid someone more than around $1000 during any ONE quarter. So your child care provider who received 1045 might trigger a tax obligation.

If you are going to pay the taxes, the babysitters need to know you are doing this, because they are going to be liable for taxes too - since you are reporting their income and paying the employer's share of taxes. They will owe the employee's share of social security/medicare, in addition to income taxes (unless you cover their portion of the social security/medicare). You will need to issue W-2s for them.

[Anonymous]

http://www.irs.gov/pub/irs-pdf/p926.pdf

[Anonymous]

Even if the nanny make only $395, she might mention that as her income when she does her annual taxes, and she might have reported it as income already should she have been laid off at her subsequent job and claimed unemployment

[Anonymous]

Anonymous wrote:I paid three different women to take care of by baby this year, each not for very long. They made $1045, $1830 and $395.

I know there's an $1800 threshold, so i'll have to report income on the middle one, but is it right that i don't have to report on the other two?

I've paid nanny taxes in the past, but i find it all super tricky. i know i should hire someone, but anyway, here i am. thanks for the help.

Are you claiming a dependent care credit for any of them?

[Anonymous]

If you didn't withhold the employee portion of FICA at the time, you will have to pay it to the irs. You can't retroactively withhold.

[Anonymous]

Anonymous wrote:You have to pay on amounts under $1800, if you paid someone more than around $1000 during any ONE quarter. So your child care provider who received 1045 might trigger a tax obligation.

If you are going to pay the taxes, the babysitters need to know you are doing this, because they are going to be liable for taxes too - since you are reporting their income and paying the employer's share of taxes. They will owe the employee's share of social security/medicare, in addition to income taxes (unless you cover their portion of the social security/medicare). You will need to issue W-2s for them.

I am fairly certain you only need to pay unemployment tax for all household employees under $1800 if you pay any one employee $1000 in a quarter. You don't have to pay and Medicare or do a w2 unless they are over $1800.

[Anonymous]

Anonymous wrote:If you didn't withhold the employee portion of FICA at the time, you will have to pay it to the irs. You can't retroactively withhold.

No that is not right. The employee would have to pay the employee's portion.

[Anonymous]

The employee doesn't file those taxes, you the employer do. Since you can't make her pay you, you will need to pay her share.

I just had my employer deduct more from my salary. You pay the FICA along with your personal income taxes so it evens out.