I started work as a nanny in Jan, and since I wasn...
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jstillw2
New Member

I started work as a nanny in Jan, and since I wasn't given a W-4, I think I have to do a 1099 for 2020 taxes. Can I start paying taxes now instead of a lump sum in Jan?

I didn't work from March-September due to COVID-19 and I collected unemployment from May-September. I just want to make sure my 2020 taxes are in order since I did collect unemployment. Thanks
3 Replies
Opus 17
Level 15

I started work as a nanny in Jan, and since I wasn't given a W-4, I think I have to do a 1099 for 2020 taxes. Can I start paying taxes now instead of a lump sum in Jan?

Do you work full-time in one family’s home, or do you work from your own home? And serve more than one client at a time.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
jstillw2
New Member

I started work as a nanny in Jan, and since I wasn't given a W-4, I think I have to do a 1099 for 2020 taxes. Can I start paying taxes now instead of a lump sum in Jan?

I work part-time for one family out of their home, currently a flat rate of $250/week, which includes money for mileage. 

Opus 17
Level 15

I started work as a nanny in Jan, and since I wasn't given a W-4, I think I have to do a 1099 for 2020 taxes. Can I start paying taxes now instead of a lump sum in Jan?


@jstillw2 wrote:

I work part-time for one family out of their home, currently a flat rate of $250/week, which includes money for mileage. 


If you work in their home and they determine the working conditions (time, place, hours) then you are their household employee.  They are not required to withhold federal and state income tax but they are required to pay social security and medicare tax and to give you a W-2 at the end of the year.  Social security and medicare is a combined 7.65% employee share plus a matching 7.65% employer share.  They can withhold your share, or pay it themelves, but if they pay the whole amount, then your share that they paid for you is added to your taxable wages.

 

For example, if you worked for 6 months and your gross wages were $6000, then your employers can either:

  1. withhold $459 from your pay (7.65%) so your net pay is less, and they pay $918 to the IRS, or
  2. they can pay the entire $918 to the IRS, but then the employee share they paid for you must be added to your wages, so your W-2 at the end of the year would show $6459 wages instead of $6000.

See here for more details and links to other IRS publications that cover this situation.https://www.irs.gov/taxtopics/tc756

 

If your total income for the year will be less than $12,600 and you are single, you won't owe any federal income tax and don't have to make estimated payments.  If you have other wages, or are married and your spouse works, you should use the IRS withholding calculator to estimate your tax owed and decide if you need to make payments.

https://www.irs.gov/individuals/tax-withholding-estimator

 

Payments can be made directly at www.irs.gov/payments, you don't need a voucher or paperwork if you pay online.

 

You would have to check with your state tax department web site to see if you are likely to owe state tax and how to make estimated payments.  They may have their own calculator for estimating payments.

 

If your employers give you a 1099-NEC instead, they are cheating you out of the employer half of social security and medicare that they are supposed to pay, since self-employed persons pay both halves.  Getting a 1099-NEC saying you were an independent contractor might also invalidate your claim for unemployment insurance since it would mean you aren't an "employee" (at least on paper), although this will vary by state.  If you have concerns about this, you should talk to your employers.   If they do try to pay you like an independent contractor, there is a process you can start to get an official ruling that you were an employee, but this process is quite adverse to them if they lose so it's best to have a common understanding from the beginning. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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