Anonymous wrote:Thanks for all of the help. She is getting a W-2. We pay her 16 an hour right now. I will talk to her about us withholding for her. To the question about why aren't we withholding...a lot of people don't withhold, and it is the responsibility of the employee.

Actually, it is the legal responsibility of the employer, not the employee, to withhold federal taxes.

OP, given what you and your husband wrote, maybe the biggest favor you can do for her is to withhold her taxes. Not to sound paternalistic here, but if you are already paying some of her taxes yourself and she is still struggling to pay federal, then she's just got a money management problem to solve. You may not be able to resolve whatever is at the root of that problem (unexpected long term bills, bad budgeting, illness in family, elder care, could be anything), but if you withhold for each paycheck, you at least will help by forcing her spread out the tax burden rather than let it pile up and cause her grief. It is not your responsibility, but if you really have the means and interest to help, you could offer her help this year and then say from now on you are withholding?

Anonymous wrote:Hssband here - I agree with all of you guys. Thanks. As I walked in the computer room my wife tried to close the window so I wouldn't see this thread. However this will not change my wife. We pay all of our nannies taxes except for federal income tax. We pay her SS/Medicare/State/Unempl/ etc - we pay both sides, her portion and the portion an employer usually withholds. So instead of 6.2 we pay 12.4% medicare and both sides of SS. It burns me up everytime we have to cut the check. But hey happy wife happy life.

Ok? Congrats?

Anonymous wrote:Thanks for all of the help. She is getting a W-2. We pay her 16 an hour right now. I will talk to her about us withholding for her. To the question about why aren't we withholding...a lot of people don't withhold, and it is the responsibility of the employee.

Uh, ok. But it is really easy for you, as her employer, to withhold her portion of taxes (as most employers do).

I have never had a nanny job where my taxes weren't withheld; whether I was paid through a payroll service or by weekly check, my employers have always done that for me.

Hssband here - I agree with all of you guys. Thanks. As I walked in the computer room my wife tried to close the window so I wouldn't see this thread. However this will not change my wife. We pay all of our nannies taxes except for federal income tax. We pay her SS/Medicare/State/Unempl/ etc - we pay both sides, her portion and the portion an employer usually withholds. So instead of 6.2 we pay 12.4% medicare and both sides of SS. It burns me up everytime we have to cut the check. But hey happy wife happy life.

Thanks for all of the help. She is getting a W-2. We pay her 16 an hour right now. I will talk to her about us withholding for her. To the question about why aren't we withholding...a lot of people don't withhold, and it is the responsibility of the employee.

Why aren't you withholding the taxes, OP, like most US employers?

Several suggestions, based on the assumption that you are already withholding SS/Med and giving nanny a W-2:

Start withholding Federal and State taxes based on the W-4 your nanny has filled out/needs to fill out. Stop expecting her to take care of filling quarterly - it's a hassle for her, and it's obviously not working.

If you feel the need to offer a financial hand, do so with a small raise that will dull the pain of losing all the Fed/State taxes from her weekly paycheck.

Take the time to determine if you are paying her an appropriate wage based on her experience, education, and job responsibilities, by using your mom network, or one of the "rate calculator" tools on the big nanny finder sites. If she's truly underpaid, give her a raise.

Now, if you are 1099'ing your nanny, my suggestions differ:

This year you need to suck it up and pay the taxes - I believe it might be your legal responsibility to do so, since you failed to properly withhold.

Stop 1099'ing her and treat her as your employee ASAP. Have her fill out a W-4, and start proper withholding. It's going to suck for her to have to start paying taxes, but it's better to know what your take home is and budget for it than to be panicking about thousands owed.

Consider that raise again, IF (and I do mean IF) she is underpaid based on the info you gather.

Agree with PPs. You should be withholding for her, and your nanny needs a budget. I get that it is tough and nannies don't make much, but she has to manage her funds. You can give her a raise if you want to help, but paying her taxes is a band-aid and not a real solution.

I also say don't do it. That's the nanny's responsibility.

Nanny here...I'm with your husband on this one. Your nanny needs to take a careful look at her budget and monthly expenses if she is living paycheck to paycheck. She should be setting aside tax money from every paycheck for her federal and state taxes (I'm assuming you're already withholding FICA per the law).

If you're nanny is so strapped for cash she needs to do one of two things. 1) Trim her expenses or 2) Find higher-paying job

It's not your responsibility to help her with her taxes. She is responsible for paying her share, just like the rest of us. An alternative to helping her pay them is offering to withhold them from her weekly paycheck. That way the money is already going toward federal and state taxes and she doesn't have to worry about coming up with the money come tax time. This would still require her to rework her budget to account for less net pay.

Do you 1099 her?

No, you shouldn't do that.

You can easily help your nanny by agreeing to withhold her portion of income taxes, so she doesn't need to put any money aside (of course she should be able to do that, but not everyone can).

If you're underpaying her, instead of paying her taxes, give her a raise.

I wouldn't get into paying your nanny's taxes. There was a recent thread about just how messy that can
get. An alternative would be suggesting you withhold her income tax along with some level of raise to help cushion the blow.

My husband and I got into this argument, because I wanted to help my nanny out with her taxes, and he says that is her responsibility like the rest of America. She is the greatest nanny and unfortunately lives paycheck to paycheck, so when taxes come around, she is usually struggling to get the money to pay them (because she isn't putting aside the money each month because she needs the funds). I want other opinions.