Schedule H

[Max W]

It has been several years since I have done one of these.  At that time, as I recall, the wages paid were grossed up.

However, in reading the instructions, it says to just enter the cash paid.

 

So if the yearly amount was $15000, that is the figure to be entered and not a gross up amount.

 

Also, the employer pays both halves of the SS & Med.

 

Am I on the right track?

TIA

[Catherine]

Nope; employee wages have to be grossed up by the employee portion of ss/medi paid by the employer.

[Max W]

Well, that is exactly what I did and then someone in the office questioned it and I looked at the instructions.

That is interesting that the instructions do not mention it.  

 

BTW, there is a neat website for doing gross ups. 

 

http://www.benefitmall.com/Tools-and-Resources/Payroll/Payroll-Calculators

 

You just have to be careful that no state info is included by using a non-tax state - TX, FL, etc

[kcjenkins]

If you pay cash wages of $1,900 or more to any one household employee, you generally must withhold 6.2% of Social Security and 1.45% of Medicare taxes (for a total of 7.65%) from all cash wages you pay to that employee. You also must pay your share of Social Security and Medicare taxes, which is also 7.65% of cash wages. (Cash wages include wages you pay by check, money order, etc.) Unless you prefer to pay your employee's share of Social Security and Medicare taxes from your own funds, you should withhold 7.65% from each payment of cash wages made.  If you pay your employee's share of Social Security and Medicare taxes from your own funds, the amounts you pay for your employee count as wages for purposes of the employees' income tax. However, do not count them as Social Security and Medicare wages or as wages for federal unemployment tax. 

[TAXMAN]

Biggest problem I ran into was TP did not think he would exceed the 1900 number. Then bang in December he goes over by 130.00. Now he gets to pay all that tax plus lady get wacked by additional wages on w-2. Ain't this a wonderful mess. Kinda reminds me of the investment income going over by $5 and losing all the EIC $.