Household Employee Earning Less than $1500

[gfizer]

I have a taxpayer who paid a lady a total of $1055 for 2007 to do some light housekeeping. No federal income taxes were withheld. My understanding is that if wages are less than $1500 that no W-2 or schedule H is required to be filed. It doesn't seem fair to me that the employee will have to report the income as self-employment income when the employer is willing to pay the ss and medicare. Is there some other way to do this or is there something I'm missing here.

I'm sure this is probably a simplistic question but I just got back from a week long mission trip in Mexico on Saturday and I'm not functioning at full speed yet.

Thanks for your input.

[Burke]

I have a taxpayer who paid a lady a total of $1055 for 2007 to do some light housekeeping. No federal income taxes were withheld. My understanding is that if wages are less than $1500 that no W-2 or schedule H is required to be filed. It doesn't seem fair to me that the employee will have to report the income as self-employment income when the employer is willing to pay the ss and medicare. Is there some other way to do this or is there something I'm missing here..

The law says you don't have to, but there is nothing stopping your TP from issuing a W-2, and paying the FICA. If she withheld the employee's half, she will have to file. If not and she is paying it all, file Sche H on her 1040.