FREQUENT QUESTIONS
- What are nanny taxes?
- Why should I pay nanny taxes?
- Who is required to pay nanny taxes?
- How much do nanny taxes cost you?
- How much do nanny taxes cost your employee?
- How can I save money by paying nanny taxes?
- How can the IRS catch me if I haven't paid nanny taxes?
- When do I pay nanny taxes?
- Am I required to withhold federal and state income taxes?
- What are unemployment taxes?
- What are the penalties involved with late filing of withholding taxes?
- Can I hire an illegal alien?
- Where do I get information about preparing nanny taxes myself?
Why should I pay nanny taxes?
If you're thinking, "Why should I pay nanny taxes? No one else pays them and I'm not running for public office." There are three reasons you should pay nanny taxes:
- It's the right thing to do.
- You save money by paying nanny taxes. There are two strategies to reduce your nanny taxes: Flexible Spending Accounts and Dependent Care Tax Credits. See How can I save money by paying nanny taxes for more information.
- The IRS will catch you. Your income tax return asks "Did you pay anyone working in your home $1,600 or more?" If you check yes, the IRS looks for your nanny tax payments. If you say no, you compromise your federal income tax return and may be audited. See Can the IRS catch me if I haven't paid nanny taxes? for more information.
