I used NannyPay2 software to pay my nanny and to withhold federal income and FICA taxes during the last quarter. Now what do I do? How do I report and pay these taxes to the IRS?
Most household employers report and pay their federal “nanny taxes” just once a year, when they file their own federal income tax return the following year (usually by April 15). Your federal employment taxes for the past year are calculated by using IRS Schedule H, and then the total “nanny taxes” shown on Schedule H are transferred over to your own Form 1040, and paid as part of your total federal income tax bill. Check out IRS Publication 926 for a more in depth explanation of this process. And the good news is that NannyPay2 software will automatically complete and print a Schedule H for you!
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