USA Nanny Tax -- Issued W2, but plans to pay taxes in April on 1040... is this okay?

[Andrew Foster]

Hello -- I have a friend that submitted a W2 for her nanny (grossing up for taxes), but plans to remit the taxes on her 1040 and submit April. This seems incorrect, because everything I'm reading says she needs to make deposits. After speaking with her, she says she did it this way last year and her friends also do it this way (in fact she filed an extension and didn't pay the taxes until Oct). Is she okay to issue the W2 and then pay the taxes in April on 1040?

Thank you very much for your help.
Sincerely,
Andrew

 

[kirby]

No. Tax is to be paid each quarter. So irs can hit your friend with interest and penalties. I'd stay out of this. She will not listen to you now and you would have to pry to find out if she ever got hit by an irs bill. It's a no-win situation for you.

 

[Ashe Skyler]

Well, I guess quite technically you could only pay once per year, but that can indeed get some nasty penalties and interest, and it is much better to handle your tax liabilities quarterly. Even filing an extension until October still puts you at risk for penalties and interest if you owe the IRS anything. She already owes a late fee for the W2s if she didn't have them filed by January 31st. (Or February 2nd, whatever day it was...) And of course there is the other obligations with W2s like filing your employees' federal, any state, social security, Medicare, unemployment insurance...

Best of luck to you. Don't let it ride on your conscience. You can lead a horse to water, but you can't make it drink.