Tax steps household employers need
to take By Kay
Bell • Bankrate.com
If you decide to hire someone to come to your
house to look after the kids, provide professional nursing care
for your ailing mother who lives with you or keep the lawn in shape
so the homeowners' association will get off your back, here's a
checklist the Internal Revenue Service and tax professionals suggest
you follow:
Household help checklist
When you hire a household employee:
Make sure the person can legally work in the United States.
File Immigration and Naturalization Service (INS)
Form I-9, Employment Eligibility Verification.
Get your employee's Social Security or tax identification
number.
Find out if you need to pay state taxes. Check with your
state
taxation office for rules. State unemployment tax contacts
can be found beginning on page 12 of IRS Publication
926.
When you pay your household employee:
Withhold Social Security and Medicare taxes if total salary
is $1,400 or more.
Withhold federal income tax if your employee requests
it and gives you a completed Form
W-4.
Make advance payments of the earned income credit if your
employee is eligible and provides you with a Form
W-5.
Determine if you need to adjust your W-4
to increase your withholding or pay estimated
taxes to cover your employment tax obligations.
Set up a household employee recordkeeping system.
By Jan. 31:
Get an employer identification number by filing Form
SS-4.
Give your employee Copies B, C and 2 of Form
W-2, Wage and Tax Statement.
