It happens every tax filing season. Families that have procrastinated or neglected “nanny tax” work need help catching up. This can be a real resource drain for personal accountants, especially during peak tax season. HomePay has filed thousands of retroactive tax returns for families over the 28 years we’ve been in business and are set up to help anyone that needs assistance.
Here’s a brief outline of our process for handling these situations:
1) Apply for Federal & State Tax IDs
Families must be registered as a household employer with the IRS and the state before retroactive returns can be filed. We’ll take care of this step by obtaining their federal EIN and state tax IDs. If the family already has tax IDs, we’ll establish ourselves as the tax agent on their accounts and take over from there.
2) Account for All Taxes Owed
We take all the wage information from the prior quarters and calculate the federal and state employee and employer taxes owed. From there, we’ll provide guidance on the options for covering the liability for FICA and income taxes.
3) Prepare and File Tax Returns
We prepare and file state tax returns and remit the taxes owed. If the state is backlogged and unable to issue the family’s state tax ID quickly, we’ll write “Applied For” in place of the number in order to get the returns filed ASAP. We also prepare a Schedule H for the family, a W-2 for the employee and file the W-2 Copy A and Form W-3 with the Social Security Administration.
4) Assist with Upcoming Alerts and Notices
When the state tax agencies process the prior quarter tax returns, they will send out notices regarding late filing penalties and interest. Since our address is the mailing address with these agencies, we’re able to intercept the notices and petition for a one-time waiver of the penalties. We have a great track record of getting these waived for first-time household employers.
Lean on us for Assistance
Whether you would like to work with us to handle this for your client or have us work directly with them, we guarantee that you’ll be glad that you enlisted our help. For more information, please don’t hesitate to call our dedicated Partner Relations team at 877-367-1964 or send us an email. We’ll make sure everything is taken care of quickly so there’s no chance of missing the tax filing deadline.