The Form 941 is allowed if your business has other employees, and you include your nanny's taxes with those of your business employees. If you are not self-employed or are self-employed without employees, you cannot use the Form 941. That's why there is so much confusion about the form. As an employer of a single person (your nanny), you will not go the 941 route.
Instead, you will use EFTPS and make the payments as an individual, selecting Form 1040 as the applicable form. You do not need to designate how much is your quarterly estimate and how much is for your employee; it all goes into the same bucket and will be applied correctly when you file your tax return. There are no quarterly reports to file.
When January rolls around, you will issue a W-2 to your nanny (showing the breakdown of all the taxes you have paid on his/her behalf. You will also file the W-3 form with the IRS, which is the summary of all your W-2 forms. (In your case, the W-3 and W-2 will contain identical information.)
Next, you will prepare your tax return, which is when the "bucket" of money gets allocated. Schedule H will calculate how much tax was due for the entire year on the wages paid to your nanny. It will take that amount and add it to your tax owed on Line 60a of your 1040 form (this is why you select 1040 when using EFTPS). The quarterly estimates you paid will be applied on Line 65. If your estimates and payments were accurate, you should be left with $0 due, and the proper reporting will be complete.
Note: The line numbers mentioned above will be different in 2018 with the tax law changes; those listed above are for 2017.
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