What to Do if You Didn’t Get a W-2 from Your Employer

This is a great addition to the post a few weeks ago called: Professional Nannies & Tax Time also from Breedlove & Associates.

If you didn’t get a Form W-2 from the family you worked for in 2010, here are the appropriate steps to follow:

1. Ask your employer(s) if the W-2 is on its way and verify they have your correct address.  The IRS asks employers to mail the W-2 by January 31.  It’s possible that it’s in the mail or was accidentally sent to the wrong address.  It’s also possible that your employer has every intention of preparing your W-2 but just missed the deadline.
2. If the family won’t provide a Form W-2, remind the family that failing to handle the “nanny tax” obligations is extremely risky (felony tax evasion with expensive penalties).  They probably have a misconception that the employer’s taxes will be very expensive – it’s worth letting them know that tax breaks for childcare expenses can offset most – if not all – of their employer tax costs.  Additionally, if they don’t pay, you don’t get financial benefits and protections, such as social security, medicare, unemployment, etc.

Note: If the family tries to give you a Form 1099 instead of a W-2, remind them that this form is for independent contractors only.  The IRS has ruled definitively that you should be classified as an employee – misclassifying you as an independent contractor is considered tax evasion.  This is important to you financially because independent contractors have to pay the entire FICA tax liability (15.3%) whereas employees only have to pay half (7.65%).  Allowing the family to make this mistake can cost you several thousand dollars per year!

1. If you still don’t get a W-2 from your family prior to the April 15 tax reporting deadline, you’ll be forced to file Form 4852, Substitute for From W-2.  The IRS instructions are available here: http://www.irs.gov/newsroom/article/0,,id=106470,00.html

If you have any questions or concerns during this process, just give us a toll free call at 888-BREEDLOVE (888-273-3356).  We’re here to help.