Taxes

Am I required to withhold taxes?

You are required by law to withhold taxes if your nanny makes over $1400.00 per year. The taxes are Social Security and Medicare (7.65%), State (determined by withholdings), and Federal (determined by withholdings). This will also enable you to take advantage of the Child Care Tax Credit.

Who can assist me with tax issues?

There are payroll services that can assist you with tax issues. Heaven’s Hands recommends using one of the services to provide you with the highest level of protection in terms of your legal responsibilities. Many of our clients use GTM & Associates, a full service payroll company, that can provide everything you need to maintain a household employee.

Is it okay if I do it myself?

Parents also have the option of doing the taxes themselves. The percentages differ as do the forms. Call the IRS at 1-800-TAX-FORMS to order forms or visit their website at www.ustreas.gov to download information. Contact your state tax office or your accountant and obtain the Circular E which is the Employer’s Handbook, which outlines everything you need to know to employ a nanny.

Is it acceptable to let the Nanny file their own taxes?

You are required to match some of the deductions so be careful with this option and research it carefully.

©2009 Heaven's Hands Nanny Research Agency | Legal and Privacy Information