In TurboTax, enter Household Employee wages at:
Federal
Taxes
Click on Wages and Income
Click “I’ll choose what I work on”
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click
the start button
On the next screen click the start button on
Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and continue the
interview until it completes.
TurboTax puts the amount on line 7 (wages) of
form 1040 or 1040A (or line 1 of form 1040EZ) with the notation “HSH”. It is considered earned income. Be advised that this kind of income could be subject to IRS scrutiny since it not only avoids social security tax, it's undocumented qualifying income for the refundable credits. Good record keeping is advised (get paid by check, not cash. Make copies of the checks and deposit it to a bank account).
The “Nanny Tax” specifically refers to the social security tax paid on a household employee’s (nanny, maid, baby sitter, gardener etc.) wages. Since no single employer paid you more than the statutory limit of $1800, they are not required to pay that.
Also since the Household employee wages were from more than one employer and no single employer paid your more than $1800, you may be able to avoid the social security tax. But, you will also not get credit for these wages with the Social Security Administration, for future benefits.
Alternatively, you can report it as self employment income, instead of Household employee wages on schedule C, paying your own social security tax ( “self employment” tax [SET]) on schedule SE. SET is 15.3% of your net self employment income. In TurboTax, enter at:
- Federal Taxes tab
- Wages &
Income
“I’ll choose what I work on”
Scroll down to:
- Business Items
- Business Income & Expenses
(Sch C)
Or type> business <in the search box
Yes
No
