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Those w/nannys -Tax question

MagPie08MagPie08 member
in Working Moms

Hi ladies- not a regular here, so please excuse me if this gets asked a lot. 

Do you figure in your childcare expenses into your FSA? I would like to do this, however, our nanny doesn't report her income from us. I don't want to deduct our childcare expenses if technically those childcare expenses aren't "appearing" anywhere, know what I mean? 

How do you handle this?

ETA - while googling this, I read that we should technically be paying & withholding "nanny tax" as her employer. Really? A raise of hands for anybody that does this would appreciated . . . 

 

Lilypie First Birthday tickers twins born at 36 wks Lilypie Second Birthday tickers
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Re: Those w/nannys -Tax question

  • jtenebackjteneback member

    Yes, technically you should be paying the "nanny tax."  We plan to.  Lots of people don't.  But you can't use the FSA for childcare if you don't, since you have to report the care provider, their social, and the amount you paid them (at least the amount you put into the FSA) and if you did you would likely get in trouble for not paying the nanny tax.

    You can't dodge a tax and then get a benefit for the same event.    

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  • MagPie08MagPie08 member
    imagejteneback:

    You can't dodge a tax and then get a benefit for the same event.    

    Darn it. :) 

    Lilypie First Birthday tickers twins born at 36 wks Lilypie Second Birthday tickers
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  • liza0828liza0828
    Yes, we pay our nanny on the books and withhold taxes.
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  • ahava2005ahava2005

    its not legal to pay 'under the table'.  Lots of people do, but you risk being audited and you can't claim the tax credit or use your FSA.

     

    Yes, you are supposed to pay a nanny tax.  You are an employer and as an employee she should be reporting her income.  What she is doing isn't legal either. 

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  • DallasHornDallasHorn member
    We do this through a dependent care flex account. We contribute the max ($5K). However, to get money out, you must fill out a form and put the childcare information - for a nanny, that means including your emplorer tax id (since you are the nannies employer).
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