We have a household employee (nanny) for the first time in 2019. We use a payroll service to collect and send in our tax obligations on a quarterly basis. It's my understanding that our tax calculation should look like:
A = Taxes we owe as individuals working
B = Taxes we owe for having a household employee
C = A + B = total taxes owed
D = Taxes our employers withheld from our paychecks
E = Taxes we withheld from our nanny's paychecks + employer taxes that we've collected and sent in
F = Total tax payments made
Our refund should equal F - C which is what we filed.
However, IRS came back and adjusted our return to be F - D. So it's saying that our payment we made does NOT include those employer taxes we've sent in. So now it's like we're paying those taxes twice. Do I call the IRS? Anyone have any ideas of how to correct this? Is there something I could have missed in our filing, or a disconnect on the IRS side?
This is something that you will need resolved. It seems that your payroll service and the IRS are the two Key players, but you are the one stuck in the middle.