How Do I File Nanny Taxes On My Own?

Handling nanny taxes on your own will take some time and effort. In fact, the IRS estimates that it will take a household employer 60 hours each year to comply with all federal and state tax, wage, and labor laws. Here’s how to file nanny taxes on your own.

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When preparing nanny taxes on their own, the IRS estimates that it will take a household employer 60 hours each year to comply with all federal and state tax laws.

Handling nanny taxes on your own will take some time and effort. Here’s what you need to do.

Before hiring a worker, you’ll need to obtain a federal employer identification number as well as any state IDs.

Before your employee starts work, you’ll need to:

  • file a new hire report with your state
  • purchase a workers’ compensation insurance policy if coverage is required in your state
  • Review all applicable tax, wage, and labor laws that pertain to household employment such as the Fair Labor Standards Act and a Domestic Workers’ Bill of Rights.
  • Have your employee complete Form I-9 for employment eligibility and Form W-4 for income tax withholding
  • Calculate your employee’s FICA tax withholdings, which will be 7.65 percent of their cash wages, and their income tax withholding based on their W-4

Once your employee starts work, you’ll need to:

  • Prepare and distribute paystubs according to federal law and the rules of your state
  • File quarterly state employment taxes
  • File quarterly federal taxes using Form 1040-ES
  • Read and respond to government notices or alerts.
  • Monitor changes to tax, wage and labor laws that could potentially affect household employment such as updates to minimum wage requirements and overtime regulations.

At the end of the year, you’ll need to:

  • Prepare and distribute Form W-2 to your employees by January 31 for the previous year’s taxes and wages.
  • File Copy A of Form W-2 and Form W-3 with the Social Security Administration by January 31.
  • Prepare Schedule H and file with your federal income tax return.

This process is time consuming and can be confusing. Mistakes can lead to costly fines and penalties. Staying up to date on tax, wage, and labor laws is a hassle.

There is a better way.

GTM relieves the risks, hassles, and worries of nanny taxes and payroll for thousands of families likes yours.

Call GTM at (800) 929-9213 and get a free, no-obligation consultation with a household employment expert.

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