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Old 02-15-2017, 01:35 PM
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Nanny Tax... Oops

In November of 2016 we hired a nanny. She was employed until last week when we let her go.

As I went to file my taxes I learned that I was supposed to submit estimated taxes for her twice already. I had assumed it would be yearly, not quarterly...oops.

What do I need to do to pay the tax withholdings of the last 3 months so that everything is up to date?

Thanks for the help!



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Old 02-15-2017, 07:29 PM
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Quote:
Originally Posted by Jeremy9 View Post
In November of 2016 we hired a nanny. She was employed until last week when we let her go.

As I went to file my taxes I learned that I was supposed to submit estimated taxes for her twice already. I had assumed it would be yearly, not quarterly...oops.

What do I need to do to pay the tax withholdings of the last 3 months so that everything is up to date?

Thanks for the help!
In general, it depends.if you pay your nanny at least $2k in 2016 , I mean aslongas you pay your nanny over $1K per quarter or $2K per year, then, you are required to pay Social Security and Medicare taxes ;These tax rates will remain the same for 2016 as they are now ? 6.2% for Social Security and 1.45% for Medicare. A nanny you hire through a placement agency to come to your home to care for your child is not your regular W2 employee if the agency sets and collects the fee, pays the nanny, and controls the terms of work for example, provides the nanny with rules of conduct and requires regular performance reports. The agency is the nanny?s employer, not you. You don't have to worry about paying any payroll taxes for the nanny. This is one of the benefits of using an agency a benefit the agency charges you for.However, once your nanny works for you directly, and not through an agency, you will ordinarily be considered her employer for tax purposes. You may have to pay and withhold payroll taxes for the nanny. It all depends on how much the nanny is paid as mentioned above. You don?t have to withhold federal income taxes from the nanny's wages unless the nanny requests it and you agree. The same rule is followed under most state income tax laws.
It?s unlikely that a nanny would make such a request because most people prefer not to have tax withheld from their paychecks. But if a nanny does ask you to withhold income tax, it?s probably not in your interest to agree; it will only create extra bookkeeping headaches for you. There is a late deposit penalty ranging from 2% to 15% depending on the length of time the deposit is late. Generally, unless you are eligible to pay taxes with your return, you should have deposited your taxes and should not have a balance due with Form 941 and Form 940. You must file Form 941, which is the business quarterly tax return, by the last day of the month that follows the end of the quarter. For example, you must file a return for a quarter that ends in April by May 31 to avoid penalties. If you fail to file your quarterly tax return by the deadline, the IRS will charge a series of penalties. For each month or partial month you are late filing Form 941, the IRS imposes a 5 percent penalty, with a maximum penalty of 25 percent. This penalty is a percentage of the unpaid tax due with the return. The IRS also tacks on a 0.5 percent tax for each month or partial month you pay the tax late. The IRS might waive late filing penalties if you have reasonable cause for filing late.you need to file payroll returns with yoru state also. You may contact an Enrolled Agent or a CPA doing taxes in your local area for professional help.



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