Thursday, February 23, 2012

How (not?) to hire a tutor

In September of 2010, we hired a tutor to come over to our home to help my two boys with their homework.  The tutor was the kiddo we now call K-daughter; she's since moved in with us and we've now claimed her as one of our own, but that claim is more emotional than legal.  The emotional ties are strong, and not so complicated.  The financial ties: those are weak but confounding.

In fact, it's the financial ties that are driving me nuts this week.  It's not her fault.  It's the tax part that's killing me.  It's the whole bureaucracy of it that's overwhelming.  The issue is not that we hired someone; it's that she works in our home.  If our boys went to her home, there would never have been a tax issue (but of course, a big part of her problem was that she didn't really have a home the boys could go to).

So, we are responsible for all sorts of taxes on the relatively small amounts we pay her.  Here's what I've figured out.
  1. I pay her, weekly, to watch over the boys when they come home from school.  In 2010, the amount I paid her was $2,720.
  2. Unbeknownst to me at the time, this triggered a round of tax forms I needed to fill out.  Each quarter, now, I fill out and mail in form UC-2 (Rev3-06), for unemployment compensation.  I also send in a check associated with this form.
  3. Then I Telefile a W3.  I call 1-800-748-8299.  From the menu options, I include "employer withholding".  I enter my 8-digit PA account number and my EIN (both of which took a while to apply for, way back when).  I enter various amounts:  compensation, tax withheld, and total deposits. I stay on line to receive my confirmation number.
Figuring out how to do all this wasn't easy.  And probably, despite spending hours on it, I haven't got it right.  In fact, I just got a politely worded letter from the IRS saying I screwed something up.  I didn't file a W2 form for her.  Drat.  I'm now learning to file a W2 -- this requires, among other things, access to a typewriter.  I have a slide rule and and abacus, but not a typewriter.  Time for a scavenger hunt.

All those political candidates who messed up their nanny taxes?  I feel for them mightily.  Forgive me for being grumpy; I'm paying a person I know and love to help take care of my kids whom I know and love.  And I want to do the right thing tax-wise, but for the life of me, I haven't been quite able to figure out what that is.

No comments:

Post a Comment