Nanny Services

When The Nanny Tax Calculator Helps
Michalis 'BIG Mike' Kotzakolios


Defined Tag: Nanny Tax Calculator.

The Internal Revenue Service requires that any employer with a household employee he pays more than $1500 cash wages in a year be compelled to tax filings for that employee. Nannies, whether live-in or live-out, fall under this category. This payment is often referred to as the nanny taxes.

The nanny taxes and payroll tax obligations cover Social Security and Medicare Taxes, which amount to 7.65% of gross wages, Federal Unemployment Tax (FUTA) which is 0.8% of Gross wages or less in most circumstances, state unemployment and disability insurance taxes levied by the employer, and may also include state and federal income tax.

The employer is solely responsible for paying the Social Security and Medicare taxes. Even if he does not deduct it from the employee’s salary, he would still be responsible for paying the tax. The federal and state taxes can be filed by the employee herself, but employers usually deduct them through payroll, ensuring that the employee receives the net salary.

Yet, all this may sound like a foreign language. This is where a nanny tax calculator comes in handy.

The nanny tax calculator allows an employer to calculate his nanny taxes. It literally takes the hassle out of this tedious and daunting task. Presented as an interactive form via specialized nanny or other financial websites, the nanny tax calculator only requires that the employer enter his relevant information and it provides the necessary calculations with just a click of a button.

The nanny tax calculator usually includes a few general fields that provide the parameters for the calculation. Fields such as pay date, weekly gross wages, pay frequency, nanny withholding rate, and withholding allowances require data entries. Other remaining fields need less detail, and usually ask straightforward questions to further narrow and tailor the calculation. Fields such as whether federal and state income tax is to be withheld require a yes/no answer, and then the user simply needs to select the state he is in. Further fields may then ask if the state selected was Maryland City or County, where another set of parameters are entered. Whether or not the nanny is a New York City resident completes the nanny tax calculator form.

With these few details, the amount of nanny taxes needed is calculated, taking the stress away from the employer.

BIG Mike is a well known author, developer and Adsense expert as well as the owner of Niche Maniacs - a unique Adsense Marketing System designed to build long-term passive income streams from Adsense, Amazon, YPN, Chitika and other PPC services.