Paying Estimated Taxes If Your Employer Does Not Withhold Income Taxes

If you are working as a household or private staff employee, it is important to understand what taxes you will need to pay. It is easy to feel confused about what you need to pay and when. This is especially true if your employer does not withhold income taxes from your paychecks. Here are some important tips:

Determine Your Taxable Income

In order to know what you need to pay, you must estimate your taxable income for the year. To get this number, you will need to reduce your gross income by all of the deductions you think you will claim on your taxes. The amount of deductions and tax credits will reduce the amount of tax you owe.

Calculate What You Owe

Take a close look at your income and determine if you need to make quarterly tax payments. Then, use IRS Form 1040-ES to calculate the amount of each payment that needs to be made through the year. The payments are calculated based on the estimated taxable income for that year. You will need to make sure that you set aside enough money from each check to cover the quarterly payments. There are four payment deadlines spread out throughout the year, on April 15th, June 15th, September 15th, and January 15th.

Avoid Penalties

Make sure you pay your estimated tax payments on time and in full. If you don’t, you could be subject to interest charges. For example, if your payment is $1,000 and you only pay $500, then a penalty could accumulate on the $500 underpayment until the time that it is paid in full.

If you still are not sure how this will work for your specific situation, or how to talk to your employer about withholding in the future, we recommend calling your employer’s payroll service and asking for advice on your specific situation. Some employers may simply not realize their responsibility in withholding taxes for your employee. We instruct all of our clients on ways to simplify their payroll and tax administration burden, and we’re happy to walk you through any tax issues as part of our pre-employment guidance!

Employer, Employment 101, Income Taxes, Private Employer, Private Staff

At Old State Staffing, we simplify hiring private staff for families throughout Washington DC, Maryland, Virginia and beyond. Ready to hire? Call us or submit a new hire request. Need guidance? Book an introductory meeting with one of our staffing experts!

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