Every year around this time I feel a creeping dread.
Anytime now, my DH is going to ask me for receipts from my charitable contributions, any random pay stubs from freelance work, and those so called ‘records’ that I keep of medical copayments ‘n stuff. Because it’s time to file our income tax statement.
Uck. As much as I appreciate all the things that my taxes pay for for my family and my community, the basic act of paying these taxes feels like a lot of work.
When it comes to income taxes, I feel sorry for au pairs, too.
Host Parents’ decisions establish which of two paths an au pair must take to file & pay income taxes.
For most au pairs, what they need to do depends on what their host parents have already done.
Path 1: Some host parents deliberately take charge. They set up a system where they withhold the estimated income tax from their au pair’s weekly stipend. In this situation, “all” the au pair has to do is file her/his statement and maybe– maybe– receive an income tax refund.
Path 2: Other host parents choose (either deliberately or because it’s too freaking complicated) not to withhold income tax on their au pair’s behalf, and so their au pairs have to file an income tax statement and sometimes actually pay $$ to the IRS.
As I understand it — and I’m not a lawyer — every au pair needs to file the form stating how much s/he earned in the USA in 2012.
Whether an au pair actually has to PAY taxes depends on how much s/he has earned in 2012. If an au pair works in the US for less than a full calendar year, it’s possible that he/she won’t earn enough IN THAT CALENDAR YEAR to have to pay any taxes out of pocket. For example, if an au pair arrived in September of 2012, s/he would have earned maybe $2,600 — way less that the minumum amount you have to earn in order to owe taxes.
First Thing? Check Your Au Pair Agency’s Resources
For all au pairs who worked here in 2012, your first step is to check your au pair agency’s site for information.
Most of the Au Pair Agencies have some information on their websites to help au pairs (and families) understand exactly what the au pair is obligated to do. They ALL remind readers, as I must too, that if you want completely reliable information that is appropriate to your situation, you should contact a tax professional. (fyi, I’m not a tax professional.)
In my quick search, I noticed that not every agency has updated their information yet to incorporate exact numbers for the 2012 tax year, but the basic information about what to do and why is easy to find. For example,
I found this download from Cultural Care, with similar Au Pair Income Tax information, but it was out of date! (if anyone sends me info about an updated version, I’ll be happy to post it here!!).
EurAuPair offers this advice, which includes some helpful examples and addresses where au pairs can get more information.
There’s a great business opportunity in helping Au Pairs with Income Taxes
If any host parent or LCC is already a trained tax advisor (and/or works for H&RBlock or similar) you could set up an online consulting service just for Au Pairs. There can’t be that many permutations of the au pair’s tax situation, and once you helped about 10 au pairs you’d have learned all you need to know to do it swiftly. Even a small fee ($50? $25) would be a bargain for the au pair and an opportuntity for the part-time entrepreneur.
Similarly, if anyone wants to write a E-Book (!!) explaining all the tax stuff, with some examples for each type of challenge, I’d be happy to post it here for others to download. Let me know if you feel like tacling* this.
In the meantime, if you’ve got any motivational advice, or if you know where that receipt is for that Girl Scout fundraiser, let us know.
*that’s an inside joke, yo.