To satisfy the IRS and remain a happy law abiding citizen, you’ll need to assume the role of employer and pay employment taxes (Social Security, Medicare, etc.), report payroll withholdings (taxes, insurance benefits and the like) and of course, make sure that she is legally able to work in the United States.
Here are a list of quick steps to get started:
Obtain state and federal EIN (Employer Identification Numbers)
You can obtain a federal EIN instantly on-line or you can download the SS-4 form and mail it, or call the IRS. To obtain your state EIN, you’ll need to contact your state government.
Verify Work Eligibility
To verify U.S. work eligibility, you will need to complete an I-9 form and follow the U.S. Citizenship and Immigration Office’s procedures.
Setup Payroll and Withholding Tracking
You must track the amounts that you pay your nanny and the amounts that you withhold from her pay. You are not required to withhold federal income tax, however your nanny is required to pay federal taxes based on her income. You may choose to withhold though to save your nanny time and possible IRS fines for tax...
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