10 tax goofs many of us keep making
Year after year, the IRS sees Americans committing the same sorts of mistakes
on their returns. Many of these errors are easy to avoid; some are more
Even if you don’t want to be a Supreme Court justice or the U.S.
attorney general, you still have to pay the payroll taxes on your nanny, housecleaner or in-home
Sorry, it’s the law. If you paid $1,700 or more in 2011 to any
one household employee, you were required to withhold, and match, both Social
Security (6.2%) and Medicare (1.45%) taxes. (Note that for 2011, an employee
gets a new 2% credit and pays only 4.2% for Social Security.) You must file Schedule H to compute and report the liability.
You’ll owe federal unemployment taxes if you paid wages of $1,000 or more
in any calendar quarter to household employees. You may also owe state
employment and disability taxes.
If you paid your children under age 18 who qualify, you may
escape liability for Social Security and Medicare taxes. For federal
unemployment taxes, qualifying children under 21 leave you free from liability.
See Publication 926 for detail
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