Filing requirements for household employee

[Jairawat]

I am filing a tax return for my daughter. She earned some income as a babysitter which qualifies her as a household employee rather than self-employment (https://www.irs.gov/publications/p926#en_US_publink100086722). She earned a total of $3,500, $1,750 each from two different households.

How should this be reported in Turbotax? The only options are W2 income of self-employment income. In this case she did not get a W2. The 'employer' didn't have to provide a W2 because it was below the limit.

[xmasbaby0]

She did not earn enough in either household to be considered as a household employee, so they did not have to issue a W-2 or withhold tax, SS, or Medicare. She has self-employment income and will pay self-employment tax as an independent contractor.

You have self-employment income for which you will pay self-employment tax for Social Security and Medicare.   You will need to use online Premium software or any version of the CD/download so that you can prepare a Schedule C for your business expenses.

https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_U...

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://blog.turbotax.intuit.com/self-employed/self-employed-tax-deductions-

calculator-2021-2022-50907/

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://turbotax.intuit.com/tax-tools/calculators/self-employed

If your self-employment income was only from cash, personal checks, credit card payments, or cryptocurrency 

Type Schedule C in the Search box and then select the Jump to link. This will take you to where you can enter any cash, personal checks, credit card payments, or cryptocurrency (Form 1099-K) related to your self-employment. You may first be asked some general questions about your business. After you answer them, you’ll be taken to the Let's get income for (your line of work) screen where you can enter this income as Additional Income.

[Jairawat]

It doesn't sound right that she has to pay taxes even when she earned such a small amount of money. I thought there was a minimum threshold below which you didn't have to pay any taxes.

[xmasbaby0]

@Jairawat When it is self-employment income of even $400, you are subject to self-employment tax for Social Security and Medicare, although she will not owe any ordinary income tax.   

[DawnC · Accepted solution]

For ordinary income tax, that is true.   However, for self-employment income, that threshold is $400.     If these were household wages from 2 different employers, you can enter them in miscellaneous income and avoid the self-employment tax.   The first item in Miscellaneous Income is Other income not already reported on Form W-2 or Form 1099.    Answer Yes on the screen that asks about household employee wages.   Then enter her wages on the next screen.   Keep records of those 2 employers in case of an inquiry.   You can only have $2600 in household wages, but that is per employer.     @Jairawat 

[Jairawat]

Perfect. This is what I was looking for.