Taxes

[Anonymous]

In my country nannying is a relatively new concept and domestic employees are always paid in cash, unofficially. There is a lot on dcum about taxes, so could someone summarise what taxes nannies have to pay, if any, and what employers have to pay?

[Anonymous]

Please do a search with your state. There's info already here.

[Anonymous]

As I said, I am not from the US and the system here is completely different. I am wondering how it works in the US, and I want to know from real people and not a policy document.

[Anonymous]

If you are an employer use Breedlove/ homepay. If you are a nanny ask your employer to use Breedlove/ homepay.

Once you get your w2 go to HNR block and pay them to do your taxes.

[Anonymous]

Really people? She said TWICE that she isn't from this country and wants to understand how it works here.

OP I wish I had an answer for you but I don't really understand taxes. All I know is that I work (nanny) and money gets taken out of my paycheck and then an accountant deals with it at the end of the years. Hopefully someone will be able to answer your question.

[Anonymous]

Anonymous wrote:As I said, I am not from the US and the system here is completely different. I am wondering how it works in the US, and I want to know from real people and not a policy document.

I guess you didn't understand. If you do a search here on this nanny forum, you will not get a policy statement. --14:02

[Anonymous]

OP, here's the breakdown:

Every person employed in the US is required to pay taxes on their earnings. Part goes to Medicare, part to Social Security. Those are the two that employers match, and the employer is legally required to withhold those percentages from salary (I believe that it's about 7.5% combined for the nanny, and the employer matches with another 7.5%, so effectively is requires to send 15% of nanny's gross salary to the IRS). Additionally, there are federal taxes, most states have an income tax, and some cities have an income tax, but the employer is *not* legally required to withhold those taxes for a domestic employee. Whether or not federal, state and local taxes are withheld, the employer must give a W-2 (if they haven't provided it by Jan 31, nanny confirms with them that they have a way to get it to her, and if nanny still hasn't received it by Feb 14, she is supposed to notify the IRS). The nanny uses the information on the W2 to file a federal tax return, and state and/or local as needed. I can't tell you what the percentages that are withheld for federal, state and local are, as they depend on a number of factors.

Does that help?

[Anonymous]

Anonymous wrote:OP, here's the breakdown:

Every person employed in the US is required to pay taxes on their earnings. Part goes to Medicare, part to Social Security. Those are the two that employers match, and the employer is legally required to withhold those percentages from salary (I believe that it's about 7.5% combined for the nanny, and the employer matches with another 7.5%, so effectively is requires to send 15% of nanny's gross salary to the IRS). Additionally, there are federal taxes, most states have an income tax, and some cities have an income tax, but the employer is *not* legally required to withhold those taxes for a domestic employee. Whether or not federal, state and local taxes are withheld, the employer must give a W-2 (if they haven't provided it by Jan 31, nanny confirms with them that they have a way to get it to her, and if nanny still hasn't received it by Feb 14, she is supposed to notify the IRS). The nanny uses the information on the W2 to file a federal tax return, and state and/or local as needed. I can't tell you what the percentages that are withheld for federal, state and local are, as they depend on a number of factors.

Does that help?

I just realized you asked about employer taxes as well. Ok, employers match the nanny's Medicare and Social Security. But they also should be paying unemployment insurance, workman's comp, and possibly an extra amount for their auto insurance, if nanny drives an employer-provided vehicle. Some employers pay nanny's health insurance.

[Anonymous]

11:19 and 22 - that was really nice of you.

I'm not the OP but I always am heartened to see genuine helpfulness here!

[Anonymous]

Hey, thanks for the detailed response, 11:19! That's exactly the kind of info I was looking for. Boy, am I glad we're not at this stage in my country yet! We definitely make less than you guys, but we get to keep it all, haha.