Schedule H

[Snaggletooth]

Ashamed I don't know more about Schedule H to be asking questions, but I just simply have not had one of these in all my long years.

It hasn't been around forever. In the 1980s various high-level govt jobs couldn't be filled because all the nominated politicians had baby-sitting done in their homes and hadn't filed employment tax returns. Once the committees were informed of this, it became difficult to find otherwise qualified people to fill deputy cabinet positions who had not violated employment tax laws and a cavalcade of some dozen or so politicians were publicly defrocked.

In Congress, this was seen as making headline news out of a very small petty violation, so Congress had IRS create Schedule H. Attach it to your 1040, reference the recipient, pay the tax and be done with it.

Really?? Is it that simple? I looked at it today, and everything on the form seems to reference full-blown information returns. W-2s, W-3s, cross pollination with state unemployment taxes, etc. Yep. The full Monty.

So what's so simple? If you're going to have to do all that, why have it?? Am I missing something?

[Jiggers]

Simple?

Depends.

Only one report to the IRS instead of the 942 quarterly and possibly a 940.

My state has an annual report for household/domestic help versus the quarterly reports required eons ago.

Yes, you still have to do W-2's and a W-3.

I was told years ago when the Schedule H was put in place and the requirement that the payroll taxes be paid by way of the 1040 that this made the non-reporting and non-payment of the taxes a more serious IRS penalty for not properly reporting and paying all taxes because the 1040 was not an accurate return.

I have the following in my questionnaire, just to CMA.
❑Yes ❑ No ❑N/A Did you have any household employees and pay wages of $1,700 to any one person?
❑Yes ❑ No ❑N/A If you had household employees, did you pay $1,000 in any quarter to all household employees?
❑Yes ❑ No ❑N/A If yes, did you file the required payroll reports?

[FEDUKE404]

Far from a magic form

Schedule H is, to a certain extent, "simple" but the underlying issues may not be.

Everything is based upon thresholds. For an employee of modest income, virtually everything can be handled on the form and settled at tax time.

For a higher paid employee (such as a full-time aide for health reasons) then you have to start dealing with FUTA/SUTA payments in addition to the expected FICA/Medicare stuff.

That may well lead to actually making payments to state agencies (to include establishing SUTA accounts, making payments to such, and also remitting state withholding taxes on a quarterly schedule).

When all is said and done, as best I can tell about the only "good" thing is the federal payments can be made via the Form 1040. And, of course, you still have to file/submit W2/W3 which at least can now be done rather painlessly online.

FE

[Burke]

True. The form was developed to help households who employed domestic help and allows them to pay the taxes on one form, once per year, rather than quarterly filing and payment. But they still have to jump through all the other hoops of employers. And they have to withhold the money from the employee and hang onto it all year if they elect this option.