Joel Berry, CPA wrote:

- quote -

Is it necessary to point out that you DON'T need an
EIN to have a household employee?

Journalists. Why did it have to be journalists?

....

- quote -

Income taxes?

- quote -

That's BEFORE February 1 and March 1. Somebody's setting
themselves up for a class action suit for the $50 penalties.
(And it's the first copy that goes to the SSA.)

And after mentioning Texas form C-3, they don't mention the
state unemployment tax payment forms and schedules.

<sarcasmAll things considered, a fine example of accurate reporting.
</sarcasm
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- quote -


The following appeared in today's (11/24/2003) Houston Chronicle:

Forms keep domestic help taxes on up and up
By RONALD LIPMAN
Copyright 2003 Houston Chronicle

Q. I have a housekeeper whom I pay about $60 a week for a
half day of cleaning. She cleans a number of other
houses, too. Am I expected to do any withholding or pay
any taxes?

A. Withholding is optional. Paying taxes is not.

For starters, you must confirm that your housekeeper is a
citizen of the United States or authorized to work in this
country. You do this by asking her to complete a Form I-9,
available by calling the Bureau of Citizenship forms request
line at 800-870-3676.

Next, you must register with the Texas Workforce Commission
by filing a Form C-1. And on an annual basis, you must file
a Form C-3 and pay Texas employment taxes. State employment
taxes start at 2.7 percent of the first $9,000 an employee
earns each year. Over the years, if your housekeepers never
file for unemployment, your tax rate will drop. Call
512-463-2699 for more information.

Federal taxes are more complicated. Your housekeeper's wages
are subject to federal income taxes, and she is the one who
must pay them. However, you may choose to pay her taxes so
she will net $60 a week. Paying some or all of her taxes
results in the IRS treating those payments as additional
income to her, thereby resulting in you having to pay even
more taxes for her on that income.

There are a number of Internal Revenue Service forms you
must file. The first is an SS-4, and it's used to obtain an
employer identification number. You can call the IRS at
866-816-2065 to obtain the number.

If your housekeeper doesn't have a Social Security number,
you can help her obtain one by completing IRS Form SS-5.

If your housekeeper will be paying her own income taxes, you
have to withhold those taxes only if she asks and you agree
to do so. Should you agree to withhold, then she must
provide you with a completed IRS Form W-4.

The way you pay the federal taxes is by attaching Schedule H
to your Form 1040. On Schedule H you calculate how much
Social Security, Medicare, federal unemployment and income
taxes must be paid.

Once a year, you will also need to complete IRS Forms W-2
and W-3. The W-2 must be given to your housekeeper by Feb.
1, and a copy of the W-2 along with the W-3 must be mailed
to the Social Security Administration by March 1.

For more information, read the instructions to Schedule H
and IRS Publication 926, the Household Employer's Tax Guide
both of which are available at www.irs.gov or by calling
800-829-3676.

--
Joel Berry, CPA
Sugar Land, Texas

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HW \"Skip\" Weldon <skip5700removethis[at]hotmail.com> wrote:
- quote -

See Form SS-8 Part III question 3 -- multiple employers.

See IRS Pub 15A (not 15) for an explanation of what SS-8 is
really looking for.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

I went to the instructions - two pages - and saw nothing
there about factors or multiple employers. Any other
suggestions?

(I'm being picky because there are different opinions here -
most seem to think that as soon as you exceed a dollar
amount, you trigger SS tax liability. I tend to agree with
you that if the person is self-employed, then they would be
treated like other SE's. But I would feel better if the IRC
said so too. Failing going through the SS-8, there's got to
be some guidelines somewhere.)

-HW "Skip" Weldon
Columbia, SC

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- quote -

Based on that factor, that favors SELF-EMPLOYMENT treatment.
Therefore, there would be no payroll tax liability for
"household employee" purposes for this person.

See the instructions for IRS Form SS-8. The factors should
be explained there.

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Michael T Wing CPA wrote:
- quote -

Unless there's a different caretaker per day of the week or
something else strange like that, a "nanny" is usually one
person who works for only one family at a time for a period,
not multiple families every week. That is far different
from a person who comes in once a week, and on the other
days, is at other people's homes.

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- quote -

Working for several people is one of the factors, and not in
itself enough to tilt the scale to contractor vs employee.

Another factor is work tools. Do you provide the cleaning
supplies, vacuum cleaner and brooms? Or does this person
bring it to your house?

For a list of employer/contractor items see IRS Pub 15A and
Form SS-8.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"D. Stussy" wrote:
- quote -

THAT does not seem to me to be a significant factor,
although it is one of the "20 factors".

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- quote -

She works one-half day a week for client in question. The
other half-days are worked for other homes. She has one
free afternoon, so that means the client is one of nine
people who hire domestic.

Can you either say what the general rule is, or point me to
a Publication, or both? Thanks.

-HW "Skip" Weldon
Columbia, SC

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D. Stussy <kd6lvw[at]bde-arc.ampr.org> wrote:

- quote -

I wonder if all the politicians and appointees who have been
hung out to dry on "nannygate" issues would feel likewise.
<g
MTW

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"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> wrote:

- quote -

keep in mind that no SS payment is required if the person
is self-employed. This can get sticky, as the IRS has a
multitude of criteria they can examine. But if the person
cleans numerous houses, you are probably off the hook.

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- quote -

What if the "domestic help" were a firm - for example, two
women doing business as "All Clean"? Would that be
different?

-HW "Skip" Weldon
Columbia, SC

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HW "Skip" Weldon wrote:

- quote -

Perhaps NONE. If this "maid" serves other people on the
up-to-6 other days of the week and the remainder of that day
if not for the full day, she may be an independent
contractor more so than a household employee. How many
other households does this person work for?

The other three answers (so far) jumped to the employee
situation a little too quickly for my liking. To simply
ignore and not even consider any of the "20 factors" from
form SS-8 is not doing due dilligence to the situation.

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Tempuser wrote:
- quote -

I just realized that my user name on my posts over the past
few sessions was showing up as "Tempuser." Sorry about
that. I changed news readers and forgot to modify the user
options and signature file.

--

Alan
http://taxtopics.net

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"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote

- quote -

From memory, $1200 or something close to that.

--
Paul A. Thomas, CPA
taxman at negia.net

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HW "Skip" Weldon wrote:

- quote -

See pub 926(?). (I only have a one-thread Internet
connection at the moment, so I can't check irs.gov.)

The answer is that SS payment is required if total
annual pay is over $1300 (for 2003, anyway), to be
paid with the taxpayer's regular tax return on
1040 Schedule H.

If total pay for ALL employees is $1000 or more in
a quarter, Federal unemployment taxes also have to be
paid.

--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.

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HW "Skip" Weldon wrote:

- quote -

Relative to a household employee, $1400 or more in wages for
the year requires withholding SS & medicare taxes. $1000 or
more in any quarter requires payment of FUTA.

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Person has maid come weekly. Pays her with cash.

At what point is SS payment required?

-HW "Skip" Weldon
Columbia, SC

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