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Reply to "How much should we raise our nanny?"
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[quote=Anonymous]15:14 again. Like I said, I don't know her, so I hate to be too cynical. But to answer your question, she is taxed on her gross income, not the net. If she adjusts her withholding while maintaining the same net, her gross income will go down, so that your raise doesn't push her into the next bracket. She will take home more, but her refund will be less. Obviously, check with your accountant, but that's how I interpret what you are saying. If she's right up against the next tax bracket, but this adjustment keeps her out of out, it's a reasonable assumption that the loss of this refund will be close to a wash with her raise.[/quote]
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