Au Pair Taxes – who, what, when, how, why?

April is “tax time”. The American tax year runs from January 01 until December 31 (unlike the Australian tax year that runs 1 July through to 30 June).

Disclaimer: This is just a math calculation and does not actually qualify as actual advice for anyone at anytime or for any reason. I am not an accountant of a financial advisor or any of those things. I am not qualified to give tax advice. I have just done my own research and reading into this, and this is the information I have found, the calculations I have done, and the conclusions I have come to about these issues, because I am a math geek! If you have an questions, please contact an accountant or financial advisor.

Some of your reading this might not have even known or realised that you are supposed to file a tax return. It is something that au pair agencies have really only made known over the last few years – before that, everyone was just told to talk to their financial advisor or accountant – but it isn’t a new thing. And it makes sense. If you live in the US for a year, and earn money, you should have to file a tax return.

First things first – you need to have a social security number to file taxes in the US. If you don’t have one, you can’t file. I have no idea what happens if you don’t file your taxes – but my guess is that is may very likely have an effect on whether or not you will be granted another USA or a greencard in the future – so, as a word of warning for those who think ‘oh well, how are they going to know if I don’t file my taxes’, if you EVER plan on coming back to the US – as a repeat Au Pair, on a vacation or even possibly to live, think long and hard before not paying your taxes.

The IRS has an information page about au pair taxes here.

The main thing that influences how much tax you have to pay, are when you arrived in the United States, and if you are a first year au pair, or an extension au pair.

The basics of it, are that as a Non-Resident Alien, you are required to pay tax on your stipend, minus an  exemption, which for the 2011 tax year (the one that we are filling in paperwork for now) is $3700. In the 2012 tax year (ie. when you file NEXT April, for the part of your year that goes into 2012) the IRS has announced that it will be $3800.

So, that means, most likely* if you arrived to the Training School before August 20th, 2011, you will owe some sort of tax. If you arrived after August 20th, then you still need to file a tax return, but you shouldn’t owe anything. (*I am doing this all around the fact that you are paid $195.75 stipend per week – if you receive an increased stipend for whatever reason, you will need to do your own calculations.)

There are a couple of things you need to do, and I am going to try and provide all the forms/links you need to help you.

Firstly (the last step) you need to post your 1040NR-EZ form to the following address:

Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215

You also need to enclose a check for the tax you owe with your form. This needs to be done before April 17, 2012 otherwise you will also be charged a late-fee and interest.

Below I have taken a screen-shot of the exact directions on how to make the check out to the IRS. You can also see this on the bottom of page 8 on this form.

 

The form that you need to fill out  can be found on the IRS website here. You can either fill in the form on your computer and then print it, or you can print it out and fill it by hand.

The long-winded instructions for filling out the form can be found here. This document also has the tax table that you will need to calculate how much you owe.

The Cultural Care sample form and information can be found in InfoSource here. You will need to login to your Cultural Care account to access this. It shows a completed tax form, however beware that it is a previous years form, and the exemption amount is incorrect for the 2011 tax year. This form is helpful for you to know which parts of the form you need to put data into, and which you just put a ‘0’ in.

  1. Calculate how many weeks you received the stipend in 2011. So, if you arrived on August 8th to the training school, your first stipend would be the week ending 19th August (I’m using the Friday for this example) and in 2011 you would have received 20 stipend payments of $195.75, which is a total income of $3915.00 in the 2011 financial year.
  2. Subtract the exemption ($3700) from the amount you earned, to find out your  taxable income. In the case of someone who arrived in August 8, 2011, this amount is $215.
  3. Use the tax table in this form starting on page 17 to find the amount of tax you have to pay. For example, for the August 8 au pair, it would fall into the ‘at least 200 but less than 225’ category, with a tax burden of $21.
  4. Part of the form also requires you to tell them how many days you have been in the US in 2011, as well as 2010 and 2009. There is a handle tool here that lets you put in your arrival date, and then if you put January 1, 2012 in the end date, it will tell you how many days you were here in 2011. If you have left the US during your year at any point, you also need to write these dates down in the boxes provided, and then subtract the FULL days you were out of the US from the total number of days (ie. if you went to Canada for a weekend and left the US on Friday and returned on Sunday, you would only count 1 days, the Saturday, as being out of the US, as you were in the US on both the Friday and the Sunday at some point).

This may serve as a little warning to au pairs who are planning on coming to the US. You will need to pay taxes, and the earlier or later in the year your departure is, the more taxes you will have to pay.

What I would tell you to do, especially if you arrive after April and before August (as you will have to pay tax DURING your au pair year, as opposed to after you return home), is to put away some of your stipend each week to save so that you have money to pay your taxes.

  • A January arrival au pair will pay an average of $600 in taxes, with the full amount due all in one tax year (ie. if your au pair year is January ’12 to January ’13, you will owe $600 in April of 2013).
  • A March arrival au pair will pay an average of $400, with the full amount due in one tax year.
  • A June arrival au pair will pay an average of $270, with half due in each tax year (ie. if your au pair year is June ’12 to June ’13, you will owe approximately $135 in April 2013, and $135 in April 2014.)
  • An August arrival au pair will pay an average of $270 also, but will have only about $40 due in the first tax year, and $230 due in the second tax year (ie. if your au pair year is August ’12 to August ’13, you will owe approximately $40 in April 2013, and $230 in April 2014.)
  • An October arrival au pair will pay an average of $400, the same as a March arrival au pair, but this amount will be due in the second tax year (ie. if your au pair year is October ’12 to October ’13, you will owe the full amount in April 2014.)
  • A December arrival au pair with pay an average of $600 in taxes, the same as a January arrival au pair, but this amount will be due in the second tax year (ie. if your au pair year is December ’12 to December ’13, you will owe the full amount in April 2014.)

Also, if you are planning on extending for a second year, you will have to pay taxes in your second year as well, and they will be pretty much a full years taxes (around $600-700) if you extend for 9-12 months, so take that into account.

I have provided some examples below of arrival dates, and estimated taxes for first year au pairs to give you an idea of what you might owe, or what you could owe if you haven’t started your year yet!

I hope this has been helpful, and feel free to comment with any questions you have and I will try to answer them the best I can!

 

Arrival January 2011
Stipend payment weeks – 46-51
Wage earned in 2011 – $9005 – 9983
Estimated tax owed – $533 – $628

Arrival February 2011
Stipend payment weeks – 42-45
Wage earned in 2011 – $8209 – $8809
Estimated tax owed – $453 – $513

Arrival March 2011
Stipend payment weeks 37-41
Wage earned in 2011 – $7243 – $8026
Estimate tax owed – $353 – $433

Arrival April 2011
Stipend payment weeks 32 – 36
Wage earned in 2011 – $6264 – $7047
Estimated tax owed – $256 – $333

Arrival May 2011
Stipend payment weeks 28 – 31
Wage earned in 2011 – $5481 – $6068
Estimated tax owed – $178 – $236

Arrival June 2011
Stipend payment weeks – 25-27
Wage earned in 2011 – $4894 – $5268
Estimated tax owed – $119 – $159

Arrival in July 2011
Stipend payment weeks 22-24
Wage earned in 2011 – $4307 – $4698
Estimated tax owed – $61 – $100

Arrival August 1, 2011
Stipend payment weeks – 21
Wage earned in 2011 – $4111
Tax owed – $41

Arrival August 8, 2011
Stiped payment weeks – 20
Wage earned in 2011 – $3915
Tax owed – $21

Arrival August 15, 2011
Stipend payment weeks – 19
Wage earned in 2011 – $3720
Tax owed – $2 (lol)

Arrival August 22 – December 31, 2011
Stiped payment weeks  1-18
Tax owed – NONE (but you still need to file the paperwork).

Just to reitterate, I am doing this all around the fact that you are paid $195.75 stipend per week – if you receive an increased stipend for whatever reason, you will need to do your own calculations.

I am not an accountant of a financial advisor or any of those things. I am not qualified to give tax advice. I have just done my own research and reading into this, and this is the information I have found, the calculations I have done, and the conclusions I have come to about these issues, because I am a math geek! If you have an questions, please contact an accountant or financial advisor.

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36 Responses to Au Pair Taxes – who, what, when, how, why?

  1. Veronica Alfonzetti says:

    You are seriously amazing at helping au pairs.. You need to write a book mate!

  2. Lucy says:

    Thank you so much for this information!! And do you know where do I have to send the form? :S I am kind of lost!! Thanks again!! 🙂

    • Cyndi says:

      Department of the Treasury income
      Internal Revenue Service
      Austin, TX 73301-0215

      I have also added the info on how to write the check out for any taxes owed (you need to include this with your tax form) into the blog.

      • Michele says:

        thank you so much. It helped me a lot to read this last year when I filled out my first time taxes for the US 🙂
        I just saw that the address in austin, TX is only if you’re NOT enclosing a payment 😉 with a payment you would have to send it to:
        Internal Revenue Service
        P.O. Box 1303
        Charlotte, NC 28201-1303
        USA

        (but I guess it’s not that big of a deal). Thanks again for writing this 🙂

  3. Elena says:

    Thank you SO much Cyndi!! I’m done now, this was such a help to me!!
    I just have one question: it says you shouldnt include the payment in our envelope, but can I send the check in the envelope??

    • Cyndi says:

      My interpretation was that you could put the check in the envelope, but not to attach (ie. staple/tape) it to the forms.

      I did some more googling and there were things saying that you could send both together. That’s what I’m doing!

  4. janina says:

    THIS IS JUST AWESOME. thank you so much! ❤

  5. Monique says:

    You’re amazing I’m glad I’ve found your blog!!!!

  6. Aileen says:

    Thank you so much. By reading this most of my questions were cleared up. I would like to ask you something that I havent found and I didnt see on your article. I arrived in USA on may 2011 and I am extending for 6 more months so I will stay until november so I have to pay taxes for this year but I cannot do it before 01/01/2013. What’s the way to do that? I’ll appreciate it 🙂

    • Cyndi says:

      From my understanding, you can fill in a form for the next tax year before you leave, which is like an estimated tax – you calculate what you “think” you are going to earn (and as an au pair, since this is a fixed amount, it will be correct) and then you pay the tax on that before you leave.

      Otherwise, I am pretty sure you can submit from your home country.

      Sorry that I don’t know more about this.

  7. Reyna says:

    WOW I love this article you must to be my LCC 😉 I arrived in august 22 so i need to fill the same form right but I wont pay anything is that correct 1040NR-EZ

  8. Patrycja says:

    hI! I have a question: Did you put there your host family address or your home town adress?

  9. Michele says:

    Thanks a lot for writing this! I guess you help many au pairs a lot with filling out the taxes.
    THANK YOU!!!

  10. Pilly says:

    Hello Cindy:
    I just wanna ask you something about this topic, That happen I arrived on Octuber 2010 then I didnt pay taxes last year, Do you know if I have to add that months from 2010 in the form 2011?

    • Cyndi says:

      If you arrived in October you wouldn’t have owed any taxes in 2010. (Because you would have earned less than $3600). You should have filled in a form and said you owed nothing, but I don’t think they are going to chase you.

      Only calculate your tax using what you earned in 2011 (ie. January 2011 – December 2011). I’m guessing you extended, and therefore were in the US the full year, which means you will owe around $600.

      • Pilly says:

        thanks so much is true that you said because is les than 3600, oh thanks you are awesome!!!

  11. thank you so much for this! it has helped me and my au pair friends so much! 🙂

  12. Eunice says:

    thanks for your help!!!! 🙂

  13. Lena says:

    Hello Cyndi!
    I am so happy that my friend sent me a link to your blog!

    I have almost the same situation as Pilly (April 10, 2012 at 1:54 pm) had – I did not pay taxes in 2010. I arrived in the US in July 2010 and I believe I needed not just to file my income but to pay something as well(((( Do you have any advise for me what I should do? Can I somehow file my taxes for 2010?

    Tank you.

    • Cyndi says:

      I found this information by googling.

      What is the penalty for filing a tax return late (if taxes are owed)?

      The penalty for filing a tax return late is generally five percent of the total tax owed per month (failure to file tax penalty). The penalty is capped after 5 months (25%). Additionally, there is a minimum penalty of the lesser of 100% of the tax owed or $135 ($100 if the return was required to be filed before December 31, 2008) if the return is over 60 days late.

      Read more: http://www.backtaxeshelp.com/faq/late-tax-filing-penalty.html#ixzz1sFCyKjnJ

      Basically I think it means that you will have to pay an extra $135 (or 100% of your tax) for it being 60 days late.

      And you will need to file it on the 2010 form (found here – http://www.visataxes.com/download/Form1040nrez.pdf)

      Other than that I can’t give you any advice as I am not sure how this works, I just googled and that’s the information I found, but I found this website – http://www.backtaxeshelp.com – try that for more info!

      • Lena says:

        Thank you, Cyndi.
        I think I got it straight now.
        Payed my 2011 taxes already, and will file and pay what I own for 2010 as well at some point.

        P.S. Is there a possibility that Au Pairs should include into the form they file any money they spent on education, or medical services, or if they donated anything (to the GoodWill for example)? Will it reduce the amount of money Au Pair should pay to IRS?

        Thank you

      • Cyndi says:

        Pretty sure that the money for education isn’t claimable. I’m not sure about Goodwill etc.

  14. Megan says:

    should i be freaking out a little ? i didnt know anything about this do i pay taxes every month im confused

  15. wenli says:

    Hi Cyndi,
    I was an aupair from 09/17/2010-09/17/2011, I never know I should pay tax. nobody told me before, include my host family and my agency, yesterday one of my friend told me about the tax. she said if I dont pay, I can return US again, is that true? how the embassy know I didnt pay the tax? my friend she fill the 1040form, is not 1040NR-EZ,according to that form aupair dont need pay any tax at fedaral tax, is that ok she fill the wrong form? and my problem is I just know this news, and now is ready pass the deadline, what should I do right now? I am not with the family since 09/17/2011, there is nobody can help me. and my english is not very well .so I hope you can help me and give me some advice. I am really worried about this thing, I dont want it will infulent me to get a new visa to come back to U.S. can I pay this tax later? thank you ,thank you very much. pls email me stephanielw88@gmail.com.

    • Cyndi says:

      Sorry, I can’t really give you advice on what to do.

      You should google “filing a previous years tax return” or something like that.

      You will have to pay a $135 late fee plus the taxes owed.

      The 1040EZ is an alternative to the Internal Revenue Service’s (IRS) 1040 income tax form and offers a faster and easier way to file taxes, meant for taxpayers with rudimentary tax situations. In order to be eligible to use this form, the individual must have a taxable income of less than $100,000, interest income of $1,500 or less, possess no dependents and fulfill other requirements set by the IRS.

      (And the NR-EZ is for non-residents, which is what an au pair is)

      Read more: http://www.investopedia.com/terms/1/1040EZ.asp#ixzz1sPXG8lOk

      I don’t know what the penalty is if you don’t pay your taxes, and how it affects coming back into the US. Sorry.

      Good luck!

  16. bertina says:

    what if i mailed a wrong form through turbotax? i mailed by 1040 instead of 1040NR.
    i don’t know what to do, can you provide some advice please?

  17. Pingback: 2012, the year that was at ‘usacyndistyle’ | The other side of the world

  18. Tib says:

    hi thanks a lot for your help. Do you know what happen for au pair who had been in rematch. I didn’t get paid for 2 weeks can I take off those two weeks?
    Ans We don’t have to count the first week of the arrival, we didn’t get paid… because we didn’t work… no?

    • Cyndi says:

      Yes, only count the weeks that you worked. If you didn’t work 2 weeks and didn’t get paid for them, then don’t count those! 🙂

  19. marly says:

    Hi! I really want to say thanks so much for this information 🙂 it’s a huge help 🙂 I’m an au pair since October 2011 I knew I didn’t have to pay taxes 2012 but I didn’t know I had to file the paperwork 😦 what happen if I didn’t file them ??

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