It's time to pay your taxes for the year 2014! As the Internal Revenue Service (IRS) considers au pairs employees for tax purposes, au pairs must file and pay income tax for money earned in the United States. InterExchange recognizes that filing and paying your taxes can be confusing. Follow the steps below in order to better understand the tax process.
Remember: The information below is a general guideline. InterExchange staff and InterExchange Au Pair USA Local Coordinators are not licensed tax advisors and cannot provide official tax advice.
Step 1: Watch the section on Understanding Compensation, Regulations and Taxes in our Know Before You Go online training. You can find this video under the Resources tab on Passport. Pay special attention to Lesson 6 Part 3.
Step 2: Have your Social Security number ready. You will need this number to complete your forms.
Step 3: You will need to calculate your earnings from January 1st – December 31st, 2014 (do not include any earnings from 2013 or 2015) and file your taxes. Using your Au Pair Schedule & Weekly Planner, add up all of the weekly stipend amounts that you earned from your host family during the calendar year 2014.
Here is an example: Anna arrived to her host family's home in early June. She worked as an au pair for 28 weeks in 2014 and received $5,481 in weekly stipend amounts in the year 2014.
($195.75 * 28 weeks = $5,481)
Step 4: Do you owe money for taxes? The exemption amount for the 2014 tax year is $3,950. This is the amount of money that you can earn which is tax-free. If you made less than $3,950 in the calendar year 2014, you do not owe any money for taxes. If you made more than $3,950 in 2014, follow the additional steps below.
Keep the following information in mind while filling out your form:
- Your Identifying Number is your Social Security Number.
- Enter the total amount you earned in 2014 on line 3, line 7, line 10 and line 12 (see this amount in Step 3).
- You should not have any itemized deductions, so the amount entered on line 11 would be "$0." If you believe you do have itemized deductions, please contact a tax professional.
- Enter the 2014 exemption amount of $3,950 on line 13.
- Subtract the exemption ($3,950) from your income reported on line 12 and put this amount on line 14. This is your taxable income.
- Look up your taxable income amount in the tax table at the end of the instructions and see the amount you will owe in taxes. Put this amount on line 15, line 17, line 21 and line 25. This is the amount you will pay to the IRS.
- Remember to sign your form at the bottom. Forms are only considered valid if they are signed.
- You must also fill out the opposite side of the form with your information (Page 2).
Step 6: Make photocopies of your 1040 NR-EZ form and keep them for your records.
Step 7: Pay your taxes to the IRS using the options listed on this page.
Kate Ferrin spent over ten years globetrotting doing a variety of things - studying in Hungary, housekeeping in Spain, marketing in Holland, teaching in Thailand, and more. After working for an intercultural youth exchange program in Chile, she came to New York and InterExchange in 2010 and is currently the Au Pair USA Participant Services Manager.