Filing taxes correctly when being paid as a nanny through Zelle

This is a great question! When you work as a nanny, you're considered a household employee (not an independent contractor) if the family controls when, where, and how you work. This means your employer should be handling payroll taxes correctly. Zelle is just a payment method - like getting cash or a check. The important part is what happens tax-wise, not how the money gets to you. Your employer should be providing you with a W-2 at the end of the year, withholding Social Security and Medicare taxes, and possibly federal and state income taxes. If they're treating you as an independent contractor (giving you a 1099-NEC) to avoid these responsibilities, that's actually incorrect for a nanny position and could cause problems for both of you later. I recommend having a conversation with the family to clarify how they plan to handle taxes. You can mention "nanny taxes" specifically and ask if they're set up to provide a W-2. If not, suggest they look into household employer requirements or use a payroll service that specializes in household employees.

After reading this post, I went through a similar situation working as a part-time tutor getting paid through payment apps. I spent hours researching tax requirements and still felt confused until I found taxr.ai (https://taxr.ai). It really helped me understand my tax obligations as a household employee. I uploaded screenshots of my payment history and job description, and it analyzed everything to tell me exactly what forms I needed and what to do next. It cleared up my confusion about whether I was an employee or contractor (sounds like you're definitely an employee based on your description). The tool also helped me prepare for a conversation with my employer about proper tax documentation. Made a huge difference in my confidence about handling the situation correctly.

I was initially skeptical about online tax tools, but I decided to try taxr.ai after reading about it here. Really glad I did! I had a situation with multiple families paying me for childcare through Venmo without any tax documentation. The system analyzed my situation and clearly explained that I was indeed a household employee, not a contractor. It showed me exactly what to discuss with each family and provided templates for having those awkward conversations about proper tax documentation. One family was resistant at first, but when I showed them the specific tax code requirements the system provided, they agreed to do things properly. I avoided what could have been a huge tax headache later. Definitely worth checking out if you're in a similar situation!

If your employer isn't cooperating with proper tax documentation, you might need to speak with someone at the IRS. I tried calling them for months about a similar issue with no luck - constant busy signals or disconnections after waiting on hold for hours. Then I found Claimyr (https://claimyr.com) which actually got me through to a real IRS agent within 45 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent walked me through exactly what forms I needed to file as a household employee when my employer wasn't handling things correctly. They explained my options clearly and helped me avoid penalties while still staying compliant. Completely changed my understanding of how to handle the situation.

I need to admit I was wrong about Claimyr. After dismissing it as a scam, I was desperate to talk to the IRS about my own household employment situation and decided to try it as a last resort. It actually got me through to an IRS agent in about 35 minutes when I had been trying for weeks on my own with no success. The agent helped me understand my rights and responsibilities when my employer wasn't handling taxes properly. They even sent me the forms I needed to protect myself. The peace of mind from speaking directly with an IRS rep was worth it - they confirmed I was taking the right steps to stay compliant even when my employer wasn't. Definitely not a scam like I originally thought!

One important thing nobody mentioned - if you earn more than $2,400 from a household employer in 2025, they're legally required to pay Social Security and Medicare taxes. Many families don't realize this. Print out the IRS "Household Employer's Tax Guide" (Publication 926) and show it to them. Sometimes families just don't know their obligations. You could also suggest they use a nanny payroll service like HomePay, SurePayroll, or Poppins Payroll which handles all the paperwork for around $50-60 per month. Better to get this right from the beginning than to deal with problems later!

I made the mistake of not dealing with this properly at my first nanny job and it was a NIGHTMARE come tax time. If your employer won't do a W-2, you'll have to file as self-employed using Schedule C and Schedule SE, and you'll pay BOTH portions of Social Security/Medicare taxes (15.3% instead of 7.65%). Plus, quarterly estimated tax payments are your responsibility if you go the self-employed route. Don't ignore this! The penalties add up.

As someone who's worked in tax compliance for years, I want to emphasize that getting this right from the start is crucial. You're absolutely correct to be concerned about this - many people get into trouble by treating nanny work as casual income. The key point everyone's made about you being a household employee (not an independent contractor) is spot-on. Since you'll be earning $14,400-18,000 annually, this definitely triggers the household employer tax requirements. Here's what I'd suggest for your conversation with the family: Be upfront that you want to handle taxes properly and ask how they plan to manage payroll taxes. You can mention that household employees earning over $2,400 annually require proper tax withholding and a W-2. If they seem hesitant, explain that it protects both of you - you from tax penalties and them from potential liability for unpaid employment taxes. The IRS takes household employment taxes seriously, and the penalties can be substantial for both parties. Document everything - keep records of all Zelle payments, your work schedule, and any agreements. Even if they handle taxes properly, good records are essential for your own tax filing.