If she doesn't fill out the W4, you can legally withhold Single and 0.

I would stay far, far away from advising her on her taxes. just have her do the w4 worksheet for deductions and leave it at that. Couch the offer in terms of her net "salary" and hourly wage and let her figure out what she will get gross.

I do think you need to tell her that the IRS will be receiving a copy of her wage report and the FICA taxes you're taking out. I agree with those who say it's possible she plans to continue not to file, and depending on her salary and family situation, she may not owe anything anyway, but she should understand that she's no longer "off the radar" as far as the IRS is concerned.

OP, I completely overlooked that this nanny hasn't worked legally before. In that case, she has no past tax returns, and she does need to just figure the "normal" amount of deductions to take and then next year she can adjust things.

So forget about the tax adviser at this point.

There are numerous tax services that can handle the entire thing for you. My employers use HomeWork Solutions. My understanding is that there is a very minimal cost increase to add withholding of Fed/State taxes to the SS/Med withholdings, and as long as nanny does indeed INTEND to pay taxes, I would strongly suggest you withhold everything. That will make life MUCH easier for everyone.

Good luck to you!

Anonymous wrote:OP good grief. Do not waste your money hiring a tax advisor to explain taxes to a potential nanny candidate. If she doesn't want you to withhold state and federal taxes, just don't do it. She's an adult. You must withhold SSN/Med but this is a straightforward % not dependent on any her current financial situation. Honestly, if she has been working under the table for years then it is unlikely that she is going to start filing her taxes now.

This, 100%. The nanny is a grownup. It is not your obligation to hire a tax advisor for your nanny, for heaven's sake. If she doesn't want you to withhold taxes, then don't. Meet your legal obligation (SSN/Med) and let her take it from there. If you think that is going to cause a problem for you in some way, then maybe this is not the nanny for you.

OP good grief. Do not waste your money hiring a tax advisor to explain taxes to a potential nanny candidate. If she doesn't want you to withhold state and federal taxes, just don't do it. She's an adult. You must withhold SSN/Med but this is a straightforward % not dependent on any her current financial situation. Honestly, if she has been working under the table for years then it is unlikely that she is going to start filing her taxes now.

Op here: gosh it gets more and more complex. Is there a payroll service that lets me deduct just DS and Medicare and not the others. I will also check about a consult with a tax advisor.

Nannydebsays has great advice here.

If you do what PP suggests and do not withhold Fed/State taxes, your nanny will likely face non-payment penalties, and will then have to make quarterly payments to both the Federal and State governments in the future. This is NOT the way to go if you want to keep things simple for your nanny.

I would suggest you offer to pay for her to meet for an hour with a tax adviser. She can bring that person her old tax returns and get their help figuring out how many exemptions to take on her W2 to minimize withholding to a level that will match her approximate tax bill.

Offering to pay for "expert" advice also gets YOU off the hook if things don't turn out well. If you act as her tax adviser and things go sideways, she'll be pissed at YOU. If she finds someone and you pay the bill, she'll be pissed at HER chosen adviser if there is an issue.

As an individual employer you are not required to withhold and file her state and federal taxes. You are only required to withhold and file the employee portion of SSN and Med. I would suggest that you do only what is required as she does not want you to withhold state and fed. In terms of her understanding what SSN/Med is you can give her an example pay stub based on this year's SSN/Med amount.

I want to crunch some numbers with the nanny to make sure she understands what we are talking in terms of pay. She has not worked legally before, so her math is all based on pay per hour.

She prefers to get her salary and pay the least amount of tax instead of waiting for a refund at the end of the year. How can I help her do this? Ask her for a W4 and see if she is exempt? Ask her for previous years tax returns? Ideas.