An elderly neighbor of mine wants to hire someone to clean his apartment twice a month or so and do some light maintenance jobs from time to time. At what point (salary threshold) does he need to withhold taxes? Thank you,
Charles
Check the instructions for schedule H of form 1040. I think the threshhold level is $1000 or $1500 (all the ones I prepare are above that amount)
But the federal is really the easy part. Its the state that likely will be more cumbersome. Each state has different rules applying to household / domestic employees. ___________________________________
-----> real address on hobokeni or hobokenx
All the rules are contained in IRS Pub 926. The following is a direct quote from that Pub:
If you and your employee have agreed to withholding, either of you may end the agreement by letting the other know in writing. If you agree to withhold federal income tax, you are responsible for paying it to the IRS. Pay the tax as discussed under How Do You Make Tax Payments? on page 7. Also, see What Forms Must You File? on page 8. Use the income tax withholding tables in Publication 15 (Circular E), Employer's Tax Guide, to find out how much to withhold. Figure federal income tax withholding on wages before you deduct any amounts for other withheld taxes. Withhold federal income tax from each payment of wages based on the filing status and exemptions shown on your employee's Form W-4. Circular E contains detailed instructions >>
NOTE: The above refers only to income tax withholding, not SS and Medicare taxes, which are covered in the Pub and on form Schedule H/ 1040.
Never. Handyman is an independent contractor with no obligation for you to withhold anything. ed
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