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[quote=Anonymous][quote=Anonymous]People always get confused about this.  When a nanny says that the employer paid her taxes, what is usually meant (though not always) is that the employer withheld the nanny's taxes for her... NOT that the employer "paid" the nanny's taxes (since the money is still being withheld from her gross income, resulting in her "net" or take-home pay).  This may feel like the employer paying the taxes since the nanny may not owe anything come tax time, but it's not technically paying the nanny's taxes... it is withholding them.  A PP was correct that if you, in fact, paid your nanny's taxes (i.e., paid her the gross salary without any withholdings AND then paid whatever money she owed in taxes come tax time) this is technically more taxable income to your nanny and should be reported as such.[/quote]

I 2nd this.  I would highly recommend getting a payroll service, at least for the first year. They will get all your forms filed with the IRS and make sure you are doing everything correctly.  Also make sure she is agreeable to what her take home pay will be.  A lot of nannies (as demonstrated here) don't really have any idea whats entailed in withholding taxes, so you don't want her to be surprised/unhappy when she gets her paycheck. [/quote]

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