If you hoped you could just pay your nanny cash and be done with it, think again. If you supervise your nanny directly, then your nanny is considered to be a "household employee." That means you will have to file certain reports with the IRS and pay employment taxes, just like any other employer.

When you hire your first household employee you must apply for an Employer Identification Number (EIN). If you file by phone, you can get your EIN immediately. If you file the paper form, it will take about four weeks. The instructions that come with Form SS-4 explain how to file. This step is important. You have to have an EIN in order to file and pay your federal employment taxes.

In addition to getting your EIN, you need to have your new nanny fill out INS Form I-9. Your employee must produce two pieces of identification, such as a valid driver's license and a passport or a social security card. Keep the completed I-9 on file in case the INS requests a copy.

Once you have an EIN, you are ready to start paying your employee, and that means that you are ready to tackle your tax issues. There are two basic categories of federal employment taxes: those that are withheld from the employee's pay and those that are paid by the employer.

Content on this site is not a substitute for professional medical or healthcare advice, diagnosis or treatment, and may not be used for such purposes. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical question or condition. Reliance on information presented on this site is at your own risk. This site contains the opinions and views of other users. Given the interactive nature of this site, we cannot endorse, guarantee, or be responsible for the accuracy, efficacy, or veracity of any content generated by our users.