AuPair-Taxes – Nightmares for AuPairs?
AuPair-Taxes! Taxes started to create nightmares for many AuPairs when the weekly pocket money (stipend) was raised a few years back. The question is often do I have to pay, do I need to pay, and what happens if I do not, what do I need to do to file and pay…
First of all, regarding Crazy-AuPairs and AuPair-Taxes
The following is information we collected on different websites, from different organizations, and opinions and was first published on 2/24/2016. Crazy-AuPairs cannot be held responsible for the interpretation of the information on this website, or any changes to IRS rules or forms that may occur. Crazy-AuPairs cannot provide any official tax advice. We recommend that you contact a tax professional if you have any specific questions regarding your own tax situation.
AuPair-Taxes – Will I owe?
The U.S. tax agency, the IRS (Internal Revenue Service) considers anyone who earns a regular income an employee. And yes, you as an AuPair is considered an employee of your host family and you receive a regular income through your weekly stipend. The IRS is however “generous” and gives a $4,000 personal allowable exemption in 2015. This number changes every year. That means, if you earned less than $4,000 in 2015, then you do not owe taxes and you are not required to file, if you earned more than $4,000 you do owe taxes and you are required to file a U.S. individual income tax return.
Why do I need to file taxes?
As said above, the U.S. law requires individuals to file a tax return and to report income during a calendar year. AuPair-Taxes are hence connected by your income, even if it is called a “stipend”.
What if I do not file my taxes?
If you choose not to file a return and pay taxes, it could
prevent you from obtaining a visa in the future. If you want to return to the U.S. and/or plan to apply for a U.S. visa in the future, including a change of status, then you will be required to pay any unpaid taxes plus penalties and interest charges. This may be more trouble and frustration than if you file your taxes and possibly pay.
How will the IRS know? Your host family can deduct their cost for having you as childcare provider from their tax return. For this they will probably provide your Social Security Number (SSN) and this is how the IRS will know you are receiving income and possibly owe taxes. InterExchange highlights, that “your host family does not need to issue you a W-2 Form to report your earnings. Your wages are paid for a domestic service performed in a private home, and you must only file an individual U.S. income tax return”. AuPair in America also answers that question that way.
What do I need to file my AuPair-Taxes?
You will need the following:
- SSN (Social Security Number)
- A list and sum of your weekly stipend payments you received between January 1st and December 31st
- The tax instructions for form 1040NR-EZ for AuPair-Taxes
- The tax form 1040NR-EZ from the IRS
- Check the instructions below to fill out the tax form
When do I need to file a tax return?
You have time to file your tax return for the total amount of stipend you received in 2015 (meaning between January 1st and December 31st, 2015) until no later than April 18th, 2016 (normally April 15th each year). By that date you also need to pay the taxes you owe, otherwise interest starts to accumulate on the amount owed. If you are staying into the next year (for example 2016), then you will need to go through the same process for that year, too (by April 15th, 2016). If you arrived in June 2015 you would therefore have to do a tax return for 2015 and for 2016 if you surpass the personal exemption rate.
How much will I have to pay?
As you may have noted, the tax year runs from January 1st through December 31st. The amount of taxes you will owe depends therefore on when you arrived in the U.S. and when you are leaving.
If you spend the full year of 2015 in the U.S. you will owe more taxes for 2015 than someone who arrived in July. AuPair in America notes that “Most au pairs who have been in the U.S.for at least 21 weeks in a calendar year will meet the minimum requirement to pay taxes (16 weeks for au pair Extraordinares).”
Now take the total sum of your stipend for 2015 and subtract $4,000. This will leave you with the amount you owe taxes on. In the tax instructions, on page 22 you find a table with the list of taxes you will owe. Lets say you were 31 weeks in the U.S. and made $195.75 per week, equaling $6,068.25 in income. Now subtract the $4,000 and that leaves you with $2,068 taxable income. The last step is to look up the taxable income in the table and you will see that the tax would be $206.
How do I fill out the tax form?
- Enter the total stipend amount you received in 2015 on line 3, 7, 10, and 12.
- You should not have any itemized deductions, so line 11 would be “0”.
- Enter the 2015 exemption amount of $4,000 on line 13.
- Subtract the exemption amount of $4,000 from your income reported on line 12 and write it on line 14. This is your total taxable amount.
- Look up the taxable income amount in the tax tables and put the amount you owe on line 15, 17, and 25 on the form 1040NR-EZ. This is the amount you need to pay to the IRS.
- SIGN the form!!! The form is not valid without your signature
- Fill out page 2
- Put your home country on line A and B
- Lines C, D, and F should all say “no”
- Line E should read “J-1”
- Line G: start with your arrival date in the U.S. (in 2015) and list any dates you left the country. Add up all the days you were in the U.S. during 2015 and enter this number on line H.
- If you filed a tax return in the previous year, answer “yes” on line I and write down the form number you filed (probably also 1040NR-EZ 2014).
- SIGN THE FORM
- MAKE A COPY OF THE FORM FOR YOUR OWN RECORDS
- MAIL THE FORM OUT and PAY
How do I pay?
You can pay by U.S. checking/savings account, debit/credit card, check or money order, and IRS2Go (an App from Google Play, iTunes, and Amazon) as well as international wire. Here is the IRS Payment website for more information. If you send a check, make a copy for your personal records!
When you file tax from the U.S. or from your home country, you should mail the tax form and your check (payable to “United States Treasury” and add 2015 Form 1040NR-EZ, your name, address, and SSN onto the check) to
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201 – 1303
You may also pay your taxes using a credit card and via phone but remember to MAIL out the tax form!!! There are three different payment providers listed on page 12 of the instruction form – there is a convenience fee charged, be sure to ask how much it is!
The address to mail the form only (without check payment but with phone payment) is:
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
What if I need help?
First of all, the IRS now has a website specific for AuPairs!!! You find it here https://www.irs.gov/Individuals/International-Taxpayers/Au-Pairs
You can talk to a tax advisor or service (for example HRBlock, CompleteTax, RTTAX, Taxback, taxact,…), you can call the International Taxpayer Service Center (from the IRS) at (1) 267-941-1000, or you can check the IRS website for help.
Is there anything else I should know for AuPair-Taxes???
Yes there is. These where the instructions for federal state taxes. However, you may be required to pay “local” state taxes, too. Each state is slightly different and you should search for state-specific information online and/or talk to your host family about state taxes.
InterExchange also notes, that “non-resident J-1 visa holders, au pairs are generally not required to pay social security and Medicare taxes. However, if an au pair has lived in the US in the past on an F, J, M, or Q Visa, they may be considered a “resident alien” during their au pair program.” AuPair in America writes it in a similar way.