Don’t Forget to Pay Your “Nanny Tax”
Knee-deep in diapers and not thinking about the upcoming tax season? Well, if you’ve employed household childcare help, you may need to plan for the “nanny tax”.
If you’ve paid a babysitter (or any other type of household help) working in your home more than $1,700, then you owe the tax and are required to file a W-2 form for your “employee”.
Before filing, you must apply for an Employer ID number, which can be done through the IRS (call 1-800-TAX-FORM). After receiving the ID number, there are simple online resources that will take the hassle out of W-2 filing, with little cost and effort.
One such website is FileTaxes.com, which is operated by Greatland – one of the country’s leading providers of W-2 and 1099 forms. FileTaxes is a web-based wage reporting tool where you can enter your reporting information for your W-2 and 1099 forms, and they will be automatically e-filed with the required agencies. You also can elect to have copies printed and mailed directly to your recipients, without having to file, print or place a single stamp. They will receive a W-2 for personal income taxes just as they would from any employer. The cost to e-file and mail to the recipient is $3.99 per form with no minimum or maximum amount required. Bonus: FileTaxes is also compatible with most traditional personal financial or tax software (e.g. Quicken or QuickBooks) if you want to import the data directly.
And because you’re not an accountant, FileTaxes.com also analyzes the data before accepting each submission to ensure forms are correctly entered and compliant with all IRS and Social Security Administration requirements.