Nannies can become confused when it is time for them to file their taxes. Therefore, today we are discussing what nannies need to know about taxes.
You Are Responsible for Reporting Your Earnings
In the event that you do not receive a W2 from your employer, you are still responsible for reporting your earnings to the IRS. This can be done via Form 4852 Substitute Form W-2.
You Can Ask for a Payment Extension
Nannies are able to ask for payment extensions just like any other taxpayers. If you do not have the money to pay for your taxes, contact the IRS to set up a payment plan. However, keep in mind that you want to make sure that you still file your taxes on time to avoid additional penalties.
Steps to Filing Taxes as a Nanny that is Considered Self Employed
- Calculate your AGI
- Apply the standard deduction
- Apply your personal exemptions
- If considered a self-employed nanny, pay the self-employment tax rate
- Put all of the above calculations on Form 1040
- Look up your income tax rate
- Multiply the taxable amount of income by the income tax rate to calculate the amount you owe
- Multiply the AGI by the self-employment tax rate to calculate self-employment tax
Are you a nanny looking for a Bellevue CPA firm? Look no farther than Huddleston Tax CPAs. You can still claim deductions and credits on your tax return, too. Filing taxes as a nanny can be a bit complex. However, once you determine if you are a self-employed nanny or considered an employee things become a little bit easier. Call us at (425) 483-6600!