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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4229
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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Nonresident alien "j-1" Source of income non US have a SSN

Resolved Question:

Nonresident alien "j-1"
Source of income non US
have a SSN with cannot work without dhs authorization
would like to hire a nanny. Monthly payment of 2000 for 12 months.
1) Do I need to pay household taxes?
2) Do I need to file for EIN or ITIN and what are the steps required?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor : Yes, first make sure that person can legally work in the United States by examining their documentation and filling out Form I-9. You can get the I-9 Form online or by calling 1-800-870-3676.
NPVAdvisor : Agree with your nanny about whether you, the employer, will withhold federal income tax. You are not required to do so, but any change to the agreement must be in writin
NPVAdvisor : Check with your state about whether you will owe state employment taxes.
NPVAdvisor : Decide whether you are going to pay your nanny's share of Social Security and Medicare taxes, or deduct it from her pay. Explain the decision to your nanny. If you agreed on an hourly rate of pay without discussing the nanny tax, and deduct employment taxes, she might be surprised to find a lower amount in her paycheck that she expects.
NPVAdvisor : Medicare and Social Security taxes amount to 15.3 percent of her pay. Half of that is the employee's share, which you withhold from each paycheck (or pay yourself, if that's how you decide to handle it). You, the employer, send both halves of the tax to the federal government.
NPVAdvisor : Decide how you will pay the nanny tax. One choice is to ask your own employer (or your spouse's employer) to withhold more from your wages in order to cover household employment taxes. Or, you can make estimated tax payments to the IRS each quarter. Another option is to pay the nanny tax on April 15 with your income tax, but if the amount is large enough you might be subject to penalties.
NPVAdvisor : Keep records of all payments to your household employees, whether cash or check.
NPVAdvisor : At the end of the calendar year, add up all the money you've paid your nanny.
NPVAdvisor : Before February, contact the IRS to be assigned an employer identification number. You can call(NNN) NNN-NNNN apply online, apply by fax or apply via mail.
NPVAdvisor : too apply online go here:
NPVAdvisor : http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
NPVAdvisor : On Form W-2, put the employee's Social Security Number in box a. Put your employer identification number in box b. Put your name and address in box c. Put your employee's name and address in box e.
NPVAdvisor : On Form W-2, write the total wages you paid boxes 3 and 5. (For the purposes of this example, I assume that you decided to pay your nanny's share of the taxes rather than withhold from her paycheck.) Multiply the total wages by 6.2 percent and write the answer in box 4. This is the employee's share of Social Security tax. If you also withheld federal income tax, it should go in box 2.
NPVAdvisor : ow, multiply the total wages (box 3) by 1.45 percent and write the answer in box 6. This is the employee's share of Medicare taxes. Add together the figures in boxes 2, 3, 4 and 6 and put the total in box 1.If you're worried about your math, the instructions for Schedule H contain a useful example with the boxes filled in.
NPVAdvisor : Here:
NPVAdvisor : http://www.irs.gov/instructions/i1040sh/ar01.html
NPVAdvisor : Copy the information onto the duplicate copies of Form W-2
NPVAdvisor : You're ready to give Form W-2 to your nanny. (Keep Copy A for yourself.)
NPVAdvisor : On Form W-3, copy the numbered boxes from Form W-2 into the corresponding boxes. (Thank you, XXXXX XXXXX making the numbers the same!) Fill in your name, address, phone number and employer identification number. Check the box that says "Hshld.emp." to indicate that you're a household employer. Sign and date the form.
NPVAdvisor : Before March, send Form W-3 and Copy A of Form W-2 to the Social Security Administration.
NPVAdvisor : By April 15, file Schedule H with your federal income tax return (Form 1040). The figures on Schedule H for Medicare and Social Security taxes should be double the figures on the W2, because you're paying the employee's share plus the employer's share.
NPVAdvisor : .
NPVAdvisor : That's it!
NPVAdvisor : Here's an excellent article on the subject:
NPVAdvisor : http://www.babycenter.com/0_legal-requirements-for-employing-a-nanny_5946.bc
NPVAdvisor : And here's the IRS guidance:
NPVAdvisor : http://www.irs.gov/publications/p926/ix01.html
Customer: My employer is from outside the us thus I dont get any taxes withheld here and I Dont pay any taxes
NPVAdvisor : This should giver yu EVERYTHING you need ... Feel free to bookmark and/or print this page
NPVAdvisor : THis has nothing to do with YOUR taxes
NPVAdvisor : This is all about paying the taxes that must be paid regarding the nanny
NPVAdvisor : Again, you can decide with the nanny about whether YOU withhold or you simply report, so thaty SHE can be compliant
NPVAdvisor : I think ig you go back and read this ,... step by step, it has EVERYTHING you'll need all the steps AND links to other help are there
Customer: and in that case I only have to pay taxes pertaining my nanny not mine
NPVAdvisor : That's right
NPVAdvisor : We're talking about paying HER social security and incme tax
NPVAdvisor : Your situation won't change at all
Customer: what documents to I need to provide for I-9
NPVAdvisor : BUT not paying the nanny tax ... HER taxes have comes under much scrutiny ;ate;y
NPVAdvisor : just a second
NPVAdvisor : Here's the site with the I=9, W2 and W3 yiu'll need
NPVAdvisor : http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employment-Tax-Forms
NPVAdvisor : .
NPVAdvisor : I-9:
NPVAdvisor : http://apps.irs.gov/app/scripts/exit.jsp?dest=http://www.uscis.gov/files/form/i-9.pdf
NPVAdvisor : .
NPVAdvisor : W-2:
NPVAdvisor : http://www.irs.gov/file_source/pub/irs-pdf/fw2.pdf
NPVAdvisor : .
NPVAdvisor : W-3:
NPVAdvisor : http://www.irs.gov/file_source/pub/irs-pdf/fw3.pdf
Customer: I have a foriegn passport and I-94 but I dont understand the second section where it says "endorsement of the alien non immigrant status as long as that period did not expired and the proposed employment in not in conflict with any restrictions or limitations?
NPVAdvisor : If you'll use the 7 or 8 steps above as a checklist, you'll be fine
NPVAdvisor : sorry just saw your last post
NPVAdvisor : you're just saying that the persons papers are in order and have not expired ... that the person is allowed to work here and is not an illegal alien
NPVAdvisor : RO that the person is a US citizen if that is the case
Customer: I see thank you very much .. how can I print this conversation
NPVAdvisor : sorry for the typo (OR that the person is a US citizen)
NPVAdvisor : either "file-print" from your browser OR you can copy and paste the whole thing into a document ALSO you can just bookmark (save this as a favorite) page
NPVAdvisor : the url and the links will stay active
Customer: as an employer is there any document I need to present together with I-9 or when applying to EIN?
NPVAdvisor : no, you can do this online here: ... http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online
NPVAdvisor : If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better. That's the only way they will pay us here.
NPVAdvisor : HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.
Customer: That is very helpful thanks my friend..I rated u as excellent
NPVAdvisor : Thank you so much! Good luck with everything.
NPVAdvisor : Lane
Customer: thanks
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4229
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.

Thanks so much for the rating Ahmed.


If you'd like to use ME again just say "For Lane only" at the beginning of your next question...OR


... just go here: NPVAdvisor



And enter your question in the question box



Thanks again,

Lane



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Lane
Lane
Tax Professional
4229 Satisfied Customers
Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986