This "simple" thing is making me think about becoming a Republican.

Use essential nanny pay it can reverse calculate based on take home. Taxes are stupid, in the end we notice the nanny gets all taxes back and more, where as we pay a shit load. In an ideal world I would just pay the nanny more rather then the government redistribute it.

Anonymous wrote:Get a nanny payroll service like Breedlove. They take care of everything...state and federal quarterly payments, payroll stubs, year end W-2, Schedule H, your EIN.

+1

You don't want to mess things up.

There is also state unemployment insurance. I did it myself but it was stressful to have someone else's taxes relying on me. I was happy when my kids started daycare.

Anonymous wrote:This is way too complicated to tell you in a quick post, OP. Do your research and consult a professional.

It's really not that complicated.

You get an EIN from the feds online http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online

You get an employer number from your state (MD online here https://interactive.marylandtaxes.com/webapps/comptrollercra/entrance.asp)

You call your homeowners insurance co and hope they can sell you a workers comp rider/policy.

You file state unemployment quarterly (MD online here https://secure-2.dllr.state.md.us/webtax/welcome.aspx)

You withhold 7.65% of wages, which can be paid, along with your share and the small federal unemployment tax, on schedule H of your federal tax return due next April (although you may need to increase your withholding to cover it).

You pay time and a half for any hours worked over 40 in a week, and pay every week or every other week.

You give your employee a record of the hours worked, wages paid, and taxes withheld each time you pay.

You file online with SSA in January to report the wages paid and print out a W-2 from their website (http://www.ssa.gov/bso/bsowelcome.htm)

Note: Personally I would add that you should look at a withholding table for state and federal income taxes and withhold those taxes (which for the feds can again be paid in April on schedule H and for MD can be paid online quarterly).

I am trying to do my research and find out about reputable services...just thought I'd start here as opposed to reinventing the wheel.

Or just pay under the table.

This is way too complicated to tell you in a quick post, OP. Do your research and consult a professional.

From a $ basis the major tax is FICA/Medicare, where both employer and employee pay 7.65% of salary. There's also state and federal unemployment, but it tends to be more like 2%, paid only by employer. The nanny will owe income tax; legally you can decide not to withhold state and federal income tax but if you do that the nanny would be required to file estimated taxes on a quarterly basis.

It takes a bit of work to get set up to do it yourself, but it's not that hard-- most things are online now. There are several services that will help you, which might range from $20-100/month or more, depending on whether you are using basic software or a full nanny tax service.

Get a nanny payroll service like Breedlove. They take care of everything...state and federal quarterly payments, payroll stubs, year end W-2, Schedule H, your EIN.

talk to a nanny tax service

Please don't move this to the Nanny Forum, Jeff --- I don't want nannies answering this financial question.

Can someone walk me through the tax issues when you hire a nanny? What should I be prepared to spend for a nanny in terms of calculating an hourly rate and taxes? What taxes, etc. do employers cover, and how to you keep track? Are there any special programs or services I should consider?

I've obviously never had a nanny, but I think we've reached the breaking point and we need to have someone care for our kids in our own home.

Any guidance would be tremendously appreciated!