When COVID-19 took over the country this last March, kids and parents alike were required to stay home from school and work unless your job was deemed essential. The burden it placed on families has been outstanding. Here we are now in the middle of a new school year and many children are still at home and there is no end in sight as to when they will be able to go back to school in person. This put many families in a position to hire some help with school when both parents are required to still find time to do their job. If you did hire an in-house teacher to help your children, you could now be an employer with tax implications. Mark Dicus & Company is here to talk about what you need to plan for as far as your taxes are concerned.
Are Tutors Considered Household Employees?
If you have people that are working in and around your private residence, they are considered household employees. This includes maids, gardeners, babysitters, housekeepers and now even teachers. Any workers in your home that you control what they do and how they do it, are your employees. A teacher in your home working with your kids falls into this category.
When Should Payroll Taxes Be Paid?
If you have a teacher that you pay more than $2,200 in a year, you are now responsible for paying payroll taxes and will need to be paying them employee wages. This means that you will be responsible for paying social security and Medicare for yourself as the employer as well as the employee. If you didn’t withhold the employee portion from their regular pay, you will be solely responsible for that money. There are forms that will need to be filled out as well.
What Tax Forms Do I Need to File?
You will need to fill out and file a Form W-2 for your employee as well as a Form W-3. This will all be reported on a Schedule H- Household Employment Taxes. This will all be filed with your individual tax return or Form 1040. If you choose not to make payments throughout the year to cover payroll tax withholdings, you will need to pay that at the end of the year in one lump sum. You may want to make a plan to pay it throughout the year because paying at the end of the year with your 1040 often has penalties and interest that ends up costing you more money.
Tax Preparation, Filing, Resolution & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
This year has been full of stressful situations that we wouldn’t normally be facing and adding on the complexities of hiring a teacher to ensure your child is getting the education that they need is just another one to add to the pile. At Mark Dicus & Company we can help you determine what steps you now need to take and help you figure out if you are a household employer. Call us today!