Nanny no w2 form

[treasur2]

Single mother TP, worked all year as nanny. Yes, paid only cash.  What form do I fill out for lack of W2? How should I counsel TP regarding possible follow-up from IRS for name or contact info for employer.  This is my first time with this very common scenario. Just curious about the typical chain of events, if any from IRS.

[treasur2]

Solved via own research. Thanks. #4852

[BobKamman]

First counsel her not to assume her employers are tax evaders, or to rely on a tax preparer with that attitude.  It's just as likely that the employers will be counseled on filing Schedule H when they get around to doing their tax returns.  The  4852 is a "turn in your employer to IRS" form, and it would have been in the best interest of the kids to settle this issue before she started work.  For now, maybe you'll pick up a new client when the boss wants to do the right thing.  

By "nanny," do you mean that this was a live-in arrangement, and she was not taking care of other children as well?

[treasur2]

It's my black sheep niece. I do hers for free. No, she did not live with the parents of the child. Its 50/50 if they are intentily evaders. Yes, they simply maybe completely unaware of the rules. so my plan is to counsel her slowly, and throughly.  But my question remains. Is it certain the parents of the child nannied, will get a letter from the IRS?  

[sjrcpa]

Has she asked her employer for a W-2?

[treasur2]

No. She is clueless on procedure or risks.

[sjrcpa]

Step1 - she needs to ask.

[treasur2 · Accepted solution]

I am aware of what ...should ..happen. However in order to motivate her I repeat I am asking what is likely to happen to the child's parents if she does not. Do they simply get a letter? for example.

[BobKamman]

What IRS has done in the past with Forms 4852 is not a prediction of what they will do in the future.  They could have done a special project on it three years ago, sending out notices to all alleged employers, or they could have done nothing for the last ten years and make 2022 the year they catch up on them.  My guess, though, is a paper-filed 4852 has less likelihood of follow-up, because you haven't already sent the data in a form they don't have to transcribe.

Where do you draw the line, though, between "nanny" and "babysitter."  A nanny is live-in household help.  Someone who goes home every night, and maybe babysits other kids at times, might be a Schedule C filer.  And qualify for QBI deduction.  Especially, if at the start of the year there was no certainty about how long the gig would last.  

[Mike3232]

Parents would normally claim Child care expenses on their return, using caregivers SS#.  
You niece cmay claim the income using Schedule C.  If no expenses listed, then she may be the one getting a letter...

[treasur2]

I am aware of all that.