You may choose to either collect your employee’s taxes via payroll deductions or fund these taxes yourself. The household employer is responsible for the payment of all Social Security and Medicare taxes to the IRS.

Your employee is due a W-2 form in January. Employee wages are reported to the Social Security Administration. Your state may require quarterly unemployment tax filings, as well as reports and remittance of state income taxes withheld, if applicable. Federal employment taxes are reconciled with the household employer’s annual Federal Income tax return. You have both Federal and State tax filing responsibilities. You are responsible for federal employment taxes when you pay household workers as little as $1,000 in a calendar quarter or when you pay any individual employee age 18 or over $2,700 in a calendar year. Failure to properly classify the worker and make the appropriate employment tax filings and payments is considered tax fraud by the IRS. Generally, these workers are your employees, not independent contractors. You become a household employer when you hire an individual to perform duties and provide services under your direction in your private home. HomeWork Solutions is a nationally recognized “household payroll” service company, providing household employers nationwide with trusted and time saving payroll and payroll tax solutions. Payroll tax compliance for your new employee does not need to be terrifying, time consuming or expensive.

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