I have started working as a nanny. My pay is directly debited into my account. How do I declare tax on this?
Answer:
If your getting a nanny's salary don't waste your time filling taxes!!
Contact the IRS and the State in which you work. For the State you may have to pay estimated quarterly earnings. For Federal you should estimate your taxes and pay quarterly or save your money until tax time.
contact the inland revenue and do a quarterly report and estimated tax see the local rep
I suggest you open a second savings account and deposit 30% of your gross earning each pay to this account. This should roughly cover you state local and social security tax that you must pay. You'll need pay estimated tax payments each quarter of the year due on March 15, June 15, Sept 15 and Dec 15 to the IRS and the State in which you earn your income. You should consult a tax advisor on the amounts you should pay to the IRS and your state - but remember the amount to the IRS must cover both your Social Security amount - ~15% of your gross if you are receiving a 1099 from your employer (meaning you are independant and they are not paying any taxes on your behalf as an employee - and federal tax.
If you work in the USA, your employer will send you a W2-40 sometime the first of the year (Jan.) with all your tax information which you use to have your taxes filed.
If you work in the USA it is ILLEGAL to work as a household employee without taxes being taken out. On that note - your employer should be doing it for you. There are many resources online for your employers to use. If they're not going to do this, then you need to find out ASAP how much you'll be expected to pay and start setting that amount aside. To declare it - you just tell them that you have made $x and that no taxes were witheld - they'll tell you how much to pay. You could also talk with a tax professional.
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