Can I deduct wages I paid a household employee (nanny) as part of the dependent care expense deduction? Would it include the taxes I withheld?

[brandonearlbecker]

I have already included money paid to after school care in the dependent care expense deduction that we used periodically throughout the year - but I am not sure if I can use the wages that we paid to our nanny which we will done on the Schedule H

[KatherineC]

Absolutely!  Yes, you can claim the amounts you paid your nanny.

You can also claim the Employer portion of the Social Security and Medicare taxes and any federal and state unemployment taxes you pay. 

You would enter the total of all these amounts as the amount you paid for dependent care.

You stated that you would be filing Schedule H to report the wages and taxes for your nanny.  

You also need to prepare Form W-2 as well as Form W-3 which, along with a copy of the W-2, will need to be submitted to the Social Security Administration.  You can do this through the TurboTax Home & Biz software which you are using.  The due date for these forms is January 31, 2018.

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