I am an Au Pair, why do I Owe taxes?
I am an Au Pair, why do I Owe taxes?
As an 🌟Au Pair🌟, visa J1 holder , you may find yourself surprised to discover that you owe taxes in the United States. Why does this happen? Let’s clarify!
The Tax Moves Blog
1. Reasons for Owing Money to the IRS:
First and foremost, it’s essential to recognize that as an Au Pair, you’re considered an employee under US tax laws. Au pairs may owe taxes due to insufficient tax withholding on their US-earned income. This occurs when the payer fails to withhold the correct amount of taxes as mandated by IRS regulations, resulting in a tax balance owed during tax return filing.
2. Potential Under-Withholding by Host Families
Another contributing factor to tax liability could be under-withholding by host families, acting as your employer. They may inadvertently under-withhold taxes from your salary due to various factors, such as unfamiliarity with tax laws or administrative errors. Remember, all individuals earning income in the U.S. must file a tax return; from the first dollar earned, taxes must be declared to the IRS.
3. Ensuring Compliance
It’s crucial to note that failure to make appropriate contributions could result in owing approximately 10 to 15% of your gross income. Additionally, remember that these taxes are payable at both the federal and state levels, although few states do not levy taxes.
4. Importance of Fulfilling Tax Obligations:
Whether Au Pairs owe taxes or are entitled to a refund, it’s imperative to adhere to tax filing obligations to ensure compliance with IRS regulations and the terms of your U.S. J1 visa. Thoroughly review provided information to prevent errors and potential penalties for late filing.