Compliments of Breedlove & Associates, written specially for Regarding Nannies
Q. My employer pays me a “take-home” amount of $525 per week and agreed to pay all my taxes on top of that. How do I know they paid my taxes to the government for me and how should I do my tax return?
A. Your family should be providing you with a paystub each pay period that shows the Gross Wages and all the associated taxes – for the current pay period as well as year-to-date totals. The employer wage reports – and all your taxpayer benefits – are based on your Gross Wages (not your Net Pay) so it is important that you have payroll documentation to ensure your tax obligations are handled accurately throughout the year.
To assure you that they’ve actually remitted your tax dollars to the government for you, going forward you may want to ask them to show you a copy of their quarterly state and federal employment tax returns – those 8 tax returns (4 federal and 4 state) will detail the state and federal tax dollars that they’ve remitted on your behalf. For 2010, you should receive a Form W-2 from your employer by early February (they are legally required to mail it by January 31). The Form W-2 will recap all your earnings for 2010, as well as all taxes remitted on your behalf during the year.
When you get the Form W-2, make sure it states your income in terms of your Gross Wages, not your Net Pay (the annual Gross Wages minus all taxes – Social Security, Medicare, and Federal & State Income Taxes – should equal your annual Net Pay amount). If it’s accurate, you can use the W-2 to do your income tax returns prior to April 15. (The IRS has a free e-file program for most workers – for more information, visit www.irs.gov).
If for any reason, you don’t receive a Form W-2 from your employer or have questions about the filing process, please don’t hesitate to use Breedlove & Associates as a resource. Our website is www.breedlove-online.com and our toll free phone number is 888-273-3356.