We just hired a nanny and I am trying to figure out how to set up all the tax stuff and all the neccessary paperwork. Does anyone have any guidance or any links that they can post to point me in the right direction??
I believe the IRS has a publication that contains all this information, as presumably does your state tax agency. We use a payroll service - Breedlove - that handles all the payroll and tax stuff for our nanny, including direct deposit, W2s, W4s, federal/state taxes, Schedule H for our tax return, etc. Given the time savings, we find their fees totally reasonable and it is so great not to have to worry about any of that. I highly recommend them.
The best resource I have found is nannytaxtools.com. It's got a guide that covers everything I needed and had calculators to that did it all for me. And it was totally free.
Re: Nanny tax??
Here is a link to a page on the IRS website that should be able to provide some guidance.
https://www.irs.gov/faqs/faq/0,,id=199649,00.html