I’ve been putting off taxes about as long as I’ve been putting off writing this post. I mean seriously!? Who gets their taxes, or even hears about “tax season” and doesn’t instantly put their heads in the sand?
In recent years, I’ve been doing the 9-5 thing complete with payroll and taxes that are mailed to my home each year promptly at the end of celebrating the holidays. Those specially marked little envelopes may be one of the last important pieces of snail mail I receive via the USPS. With the delivery of those also comes the slow rising anxiety, the worrying about the unknown, the panic, the dread, the absolute fear of what all those numbers mean for my bank account. The one nice thing I can count on is that my employer has already done most of the hard work (or paid some one to do it). All I need to do is enter in some numbers into boxes and my taxes are done! Regardless of whether I pay or get paid, I’ve completed my duty as a tax paying citizen and gotten another year under my belt. The ease of my current tax paying situation wasn’t always the case for me, or many other nanny/child care providers.
When I started off as a nanny I was young and naive. I was also broke and learning to live on my own and without parental financial support. I wasn’t savvy on the employment laws and whether taxes were required. I didn’t really care to know, if I am honest. I worked full time with one family who used a payroll service, covered my taxes and allowed my ignorance to continue all while ensuring I was following the law. This was obviously something I was not aware of at the time but am so grateful for now.
I moved on to new families, began doing nanny shares, working fewer hours in one home but many hours in many homes. Not all my employers were so eager to follow suit. There was “confusion” as to what made a person a “taxable employee” verses a “self employed” care giver, was “babysitting” for so few hours really worth the effort to find out? To a few employers the answer was no. In my young eyes, the answer was clearly “no,” why “pay the man” when I can barely pay the rent? Who had time to figure out taxes? Who wanted to remember to record hours and supply the government with quarterly filings? And so I didn’t push the issue and some paid taxes and some didn’t and some pretended to know nothing and some truly didn’t care and I just went along with it.
Ultimately, it wasn’t my best decision or wisest moments but you live and learn, right? I grew up and realized I have a duty as an American citizen. I want nice roads, public transportation, and amazing education for the future children. I want to fund parks and programs to enhance life for all. I want to contribute to the good around me and stop passing the buck to my neighbor.
I’m here to help you live and learn and hopefully with a lot fewer growing pains!
I’ll be straight forward and direct…
As a nanny in Washington state, you are required to pay taxes. Your employer is required to have you fill out W-2 and I-9s upon starting your job. It is clear and simple and with the internet, very easy to find.
Here is a quick run down on what I found:
-A nanny is a person hired by a family to work within their home. The job of the nanny is to complete tasks and duties as given by the family.
-This person is considered a “household employee.”
-Nannies are not self-employed or an “independent contractors,” using these classifications can be consider tax evasion!! Do not use or accept 1099 unless you have further looked into the laws. There are specifications around these and under most circumstances nannies do not fall under them.
-Employers of a “household employee” must withhold taxes once a nanny makes $2,100 which has increased just this year.
– Employers are responsible for withholding Federal taxes and paying sick leave (also new this year for Washington State).
-Social Security and Medicare are also employers responsiblity to withhold.
So simple and so clear! If you want to double check any of these findings or get yourself more educated here are a few of the links I found useful:
http://pixeltheoryinc.com/nanny-tax-how-to.html
http://www.francis-company.com/le-nannytax.php
https://www.care.com/homepay/resource-center/requirements-by-state/washington
https://nannyparentconnection.com/blog/payquestions/
https://www.sapling.com/8467457/washington-state-taxes-nannies
Look for more tips on taxes in the upcoming days: things like where to get the proper paper work, when and where to get help filing, how to prepare better for next year, and more!