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Help, and I apologize ahead of time for my ignorance. Please be nice! My wife and I have hired a person to watch our children in our home. We have paid her X dollars so far this year. My wife has a FSA dependent care account that now has $2800 available. We are completely ignorant to our responsibilities as "employers" of our "domestic employee." From what I understand, we should be paying the appropriate taxes (medicare, Soc. Sec., Federal & State unemployment?) taxes for both employee and employer, meaning we are expected to pay this % on top of her X salary (it looks like this will come out to be about 15%). So imagine we have paid her $3000, we owe $450 in taxes (about). These taxes have nothing to do with the FSA account correct, i.e. the FSA being tax deferred doesn't mean we are exempt from domestic employee/employer taxes? In other words if we submit a receipt for the FSA $2800 reimbursement with her Soc. Sec. # (EIN) the govt (state and fed) will be looking for the taxes we owe right? What do i need to do now in order to make this all legal?
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