Saturday, March 08, 2008
Considering Getting Right with the IRS?
Millions of Americans prepare and submit their annual income tax returns to the IRS in the weeks leading up to April 15 - AKA "Tax Day." Several hundred thousand taxpayers owe "nanny taxes", the employment taxes associated with their employment of a nanny, housekeeper, or regular babysitter. The IRS estimates that 800,000 or so of these otherwise law abiding citizens will fail to report these wages and pay these taxes.
2008 is a bit different, because for the first time we have $300 - $1200 tax refunds available to these household workers IF they file an income tax return. The college student who nannied over the summer and earned $4000 will quickly realize that the tax refund exceeds their liability and will actually WANT to file the tax return. Ditto for the $75 a week housekeeper. Free money anyone?
Families can avoid IRS penalty and interest charges, as well as enjoy preferred FUTA rates if they report and pay these taxes on or before April 15.
Nannies and other domestics who want to "get right" with the IRS have several options when the family fails to provide a W-2 form. Each of these options results in the family entering into a pen pal relationship with the IRS, and the eventual payment by the family of the back taxes, penalties and interest charges. It is not a pleasant position for the family to be in.
Families are encouraged to contact HomeWork Solutions to discuss their situation and available options with a client service representative.
2008 is a bit different, because for the first time we have $300 - $1200 tax refunds available to these household workers IF they file an income tax return. The college student who nannied over the summer and earned $4000 will quickly realize that the tax refund exceeds their liability and will actually WANT to file the tax return. Ditto for the $75 a week housekeeper. Free money anyone?
Families can avoid IRS penalty and interest charges, as well as enjoy preferred FUTA rates if they report and pay these taxes on or before April 15.
Nannies and other domestics who want to "get right" with the IRS have several options when the family fails to provide a W-2 form. Each of these options results in the family entering into a pen pal relationship with the IRS, and the eventual payment by the family of the back taxes, penalties and interest charges. It is not a pleasant position for the family to be in.
Families are encouraged to contact HomeWork Solutions to discuss their situation and available options with a client service representative.
Labels: nanny tax evasion, nanny tax filings, tax rebates
