By Tom Breedlove, HomePay by Breedlove
2015 is here and that hopefully means another happy year filled with fun for your charges and minimal headaches for you. For us in the tax world, the start of the year is always a time where we like to remind you about a couple of upcoming items that are crucial to your financial well-being. Sometimes it seems weird to talk about taxes in January, but you don’t want to be faced with any uncertainty in April when the filing deadline is looming.
Expect your W-2 no later than February 2nd
If you earned $1,900 or more from any family you work for in 2014, they are required to send you a W-2 by February 2. Normally this deadline is January 31, but since this date falls on a Saturday this year, the IRS gives an additional business day for families to get this form to you. You’ll use the W-2 to file your personal income tax return. You may not pay a lot of attention to the numbers on your W-2, but they actually mean a lot. The boxes that designate Social Security taxes and Medicare taxes are just some of what the family is reporting to the Social Security Administration so you get credit toward your eventual retirement.
If you worked for a family, but did not earn at least $1,900 from them, do not expect to receive a W-2. However, the IRS still wants you to report this income so you’ll need to enter it on Line 7 along with the letters “HSH” to signify household employment wages. If you worked for multiple families that did not pay you $1,900, just enter the total amount of wages you earned from all these employers.
Your personal information is safe
Over the past year, we’ve had several nannies write or call us because they worked for a brief period of time for a family, but out of the blue, the family contacts them asking for their Social Security number. The family tells the nanny they need it for their taxes, but the nanny is concerned because no taxes were ever withheld from her pay.
If this sounds familiar, don’t be alarmed. Families that have childcare expenses, i.e. a nanny, can apply the wages they paid the nanny toward a tax break that can save them a little money. To take the tax credit, the family needs the nanny’s Social Security number because the form they’ll fill out requires it. It’s wise to be skeptical of giving out your personal information, but in this case, it’s okay.
Throughout the year, if you have any questions or concerns over your employment with any family, please feel free to visit us at www.myhomepay.com or give us a call. We’ll be happy to talk to you or the family you work for to help clarify any confusion that may arise