Wednesday, January 16, 2008
January Nanny Tax Deadlines Fast Approaching...
Do you have a nanny caring for your child? January is when the rubber hits the road for nanny employers (ditto for housekeepers, maids and other household staff) vis a vis the nanny taxes.
Your nanny or other household staff are due a 2007 Form W-2 Wage and Tax Statement no later than January 31. This is a multi-part form, with several copies for your employee, a copy for the Social Security Administration, and possibly a copy for your state.
Your state unemployment taxes are due by month end in most circumstances (check your forms, some deadlines are different).
Did you deduct state income taxes from your worker's payroll? You not only have to make your end of year payment to the state this month, but most likely also have to provide an annual reconciliation statement with a copy of your W-2 form(s) by the end of the month.
Payment of your federal nanny taxes is reconciled on Form 1040 Schedule H - an attachment to your personal federal income tax return. This effectively adds your nanny taxes to your personal income tax obligation. You need to report and pay these taxes to qualify for your child care credit or to claim funds in your dependent care account.
Thinking of skipping the nanny tax? Think again. You sign your personal income tax return under penalties of perjury. Historically, in times of federal budget deficits and declining revenues (heard the term recession lately?) the IRS steps up collection efforts. A two income family with dependent children without claimed child care expenses may very well be painting a red bulls-eye target on their income tax return!
You can learn more about the risks and penalties of nanny tax non-compliance at the 4nannytaxes.com website.
Your nanny or other household staff are due a 2007 Form W-2 Wage and Tax Statement no later than January 31. This is a multi-part form, with several copies for your employee, a copy for the Social Security Administration, and possibly a copy for your state.
Your state unemployment taxes are due by month end in most circumstances (check your forms, some deadlines are different).
Did you deduct state income taxes from your worker's payroll? You not only have to make your end of year payment to the state this month, but most likely also have to provide an annual reconciliation statement with a copy of your W-2 form(s) by the end of the month.
Payment of your federal nanny taxes is reconciled on Form 1040 Schedule H - an attachment to your personal federal income tax return. This effectively adds your nanny taxes to your personal income tax obligation. You need to report and pay these taxes to qualify for your child care credit or to claim funds in your dependent care account.
Thinking of skipping the nanny tax? Think again. You sign your personal income tax return under penalties of perjury. Historically, in times of federal budget deficits and declining revenues (heard the term recession lately?) the IRS steps up collection efforts. A two income family with dependent children without claimed child care expenses may very well be painting a red bulls-eye target on their income tax return!
You can learn more about the risks and penalties of nanny tax non-compliance at the 4nannytaxes.com website.
Labels: nanny tax avoidance, nanny tax compliance, nanny tax deadlines
