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Old 03-26-2012, 03:52 PM
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How should I report household employee income?

In 2011, I received just under $1,700 from a family for whom I worked as a household employee. They provided me with a 1099-MISC for this amount. Can I report this income on line 7 of Form 1040 and write HSH on the line beside the amount, or do I need to report the income in another way?

Thank you!



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Old 03-27-2012, 12:47 PM
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“They provided me with a 1099-MISC for this amount. Can I report this income on line 7 of Form 1040 and write HSH on the line beside the amount, or do I need to report the income in another way?”---->No, not on 1040 line 7 UNLESS you receive a W2 from your ER.UNLESS your ER pays you , a H/H EE, more than $1,700 in 2011, your ER doesn’t need to withhold your Soc Sec taxes, FICA taxes, from your paychecks. Your ER also doesn’t need to withhold your federal tax from your wages. However, as long as your ER you pays cash wages to you totaling more than $1,000 in any calendar quarter during the calendar year,2011, or the prior year, 2010, then he/she needs to pay FUTA tax, . You ,as an H/H EE doesn’t pay this tax, OK??. So, as long as you are a self-employed or if you are providing care outside the home, you need to file a Sch C and Sch SE(self employment tax) on the amount shown on 1099 line 7 . You need to report it on Sch C line 1b Part 1 and as long as the amoun ton line 29/31 is $400 or exceeds $400, you need to file Sch C and as long as the amount on Sch SE line 4 is also $400 or exceeds $400, you need to file Sch SE and need to pay SECA taxes. If you are filing as a sole proprietor and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.However, you do not have to pay estimated tax for the current year if you had no tax liability for the prior year ;you were a U.S. citizen or resident for the whole year ;your prior tax year covered a 12 month period. ALSO, you'll face a self-employment tax , the equivalent to payroll taxes if you worked for an ER, of 13.3 percent of all earnings up to $106,800 in tax year 2011. You probably will not have any income tax liability safter dedcutions of exemption/std deduction(s) or etc but the SECA tax has to be paid. If on the other hand, there were no expenses related to this income, then you should include this 1099-Misc income on Form 1040 Page 1 Line 21, as other miscellaneous Income subject to self-employment taxes. Thus, subjecting you to a higher income tax on the 1099-Misc income earned, as this income is going be subject to both regular tax rate and S/E tax. ALSO, if you do not receive a Form 1099-MISC every year or you received a 1099-MISC for a job you performed once, THEN, you can report this income on line 21 of Form 1040, NOT on Sch C line 1b Part 1.



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Old 03-30-2012, 12:39 PM
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Thanks for your reply. My employer did not give me a W-2 because the amount was less than $1,700. (In 2012, however, my employer is withholding FICA taxes from my wages and will give me a W-2 at the end of the year, because the wages for the year are expected to be over $1,700.)
And my employer did not pay me over $1,000 in any calendar quarter in 2011.

I am not self-employed or providing care outside the home; I am classified as a household employee. So would it be correct to report my 2011 income (less than $1,700) on line 21 of Form 1040 and pay income tax but not social security and Medicare taxes?

This seems correct, since Pub. 926 (Household Employer's Tax Guide) says this: "If you pay the employee less than $1,800 in cash wages in 2012, none of the wages you pay the employee are social security and Medicare wages and neither you nor your employee will owe social security or Medicare tax on
those wages."

Thanks again for your help.



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Old 03-30-2012, 01:27 PM
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“My employer did not give me a W-2 because the amount was less than $1,700.”--->Regardless of salary(wage) amount, an ER needs to issue a W2 to an EE and in most cases, needs to withhold taxes,i.e., FICA Taxes, federal/state taxes( I mean as long as your ER is trying to report and pay the 'nanny' tax, for you who worked on his property, your ER needs to issue a W-2 to you, your ER should pay the SS taxes on a Sch H with his 1040.). As long as you want to pay your own taxes, then your ER needs to give you a 1099-MISC instead of a W2(in your case, since you are not a self employer, an IC, your ER doesn't need to issue you a 1099).. You really do NOT qualify as an EE for which your ER would give you a W-2 because you are NOT a household EE.
“ (In 2012, however, my employer is withholding FICA taxes from my wages and will give me a W-2 at the end of the year, because the wages for the year are expected to be over $1,700.)”---->Correct; as said previously, If you are paid wages exceeding a minimum amount in a tax year, then your ER must withhold Social Security and Medicare taxes. You may also request that your ER withhold federal income taxes, too(if you want).
“And my employer did not pay me over $1,000 in any calendar quarter in 2011.”--->Your ER didn’t have to withhold FICA taxes form yourpaychecks.
“I am not self-employed or providing care outside the home; I am classified as a household employee. So would it be correct to report my 2011 income (less than $1,700) on line 21 of Form 1040 and pay income tax but not social security and Medicare taxes?”---->corrrect; you do not need to file Sch C/Sch SE as you are NOT a self employer. So, you can report your H/H EE income on 1040 line 21 as other income.

“This seems correct, since Pub. 926 (Household Employer's Tax Guide) says this: "If you pay the employee less than $1,800 in cash wages in 2012, none of the wages you pay the employee are social security and Medicare wages and neither you nor your employee will owe social security or Medicare tax on those wages."---->Correct. UNELSS you request your ER to withhold your federal taxes from your wages, your ER ALSO doesn’t need to withhold your federal taxes, either.


Last edited by Wnhough : 03-30-2012 at 02:07 PM.


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Old 03-30-2012, 10:57 PM
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"You really do NOT qualify as an EE for which your ER would give you a W-2 because you are NOT a household EE."
I don't understand this statement - why do you say that I am not a household employee?



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Old 03-30-2012, 11:04 PM
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I don't understand this statement - why do you say that I am not a household employee?”---> I mean as you can see, you are subject to W2 as a H/H EE; however, as you said, you didn’t receive a W2.So, in my opinion, you are not technically treated as an EE. I know that you are employed as an EE by your ER.That is what I mean.



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