Hello!
I'm attempting to input withholding made by my payroll company during 2021 for a nanny. Unfortunately, TurboTax does not have fields which allow me to input social security and medicare payments made during 2021 and were detailed in Schedule H completed by my payroll company. I was able to enter the "Federal income tax withheld, if any" on the Nanny and Household Employee Tax screens.
Any assistance you all can provide would be much appreciated.
TurboTax is automatically computing the FICA for your employee (social security is 6.2% and medicare is 1.45%) You shouldn't need to enter these amounts, only verify what was already paid on your behalf by the payroll company if anything.
Based upon my draft return, it seems as though TurboTax is significantly understating the withholding made for SS and Medicare related to my household employee. The increased amount of projected tax owed is just about equal to the amount withheld.
Yes, the employee pays half and the employer pays half, That is how the tax works. See Do I have to pay taxes on what I pay to my Household Employee?
Completely agree! As the employer, my payroll company withheld amounts and made payments the IRS on my behalf. My question is this: how do I get these additional amounts reflected on my return?
Usually only FUTA is paid during the year for a household employee. All taxes are then paid using the sch H for the employee and employer. If you paid more than $1,000 in any quarter, you do not file sch H.
See:
2021 Schedule H (Form 1040) - Internal Revenue Service.
2021 Instructions for Schedule H - IRS
and verify that this form is required. Also, verify that you paid Medicare and Social Security tax through the payroll provider rather than the standard Unemployment.
Getting closer!
Just talked to my payroll company and they confirmed that the total of quarterly estimated payments was equal to the total amount of taxes due for my nanny's employment in 2021 (federal, ss, medicare, and FUTA). So, I went ahead and input the actual estimated payments made to the IRS, but I'm not sure whether I should input an amount in "Federal Income Tax Withheld, if any" when filling out the Nanny section on TurboTax. I'm inclined to enter 0, since the federal withholding was included in the estimated payments made and I don't want to "double-count" and overstate the amount of payments made to the IRS in 2021. Any additional help you could provide would be much appreciated!
If you already had a payroll company complete and file the W-2/W-3 (along with the annual and quarterly filings) then you do NOT ALSO file a Sch H unless you like paying the taxes twice. STOP trying to complete a Sch H for what has already been filed. The Sch H is ONLY for those not already using a payroll company.
I believe that Schedule H is required even though estimated payments were made by my payroll company. But you are right that the calculation of taxes due will be overstated by TurboTax if one fails to include the amount of estimated payments made towards 2021.
Lastly, I did confirm that you should include the amount of federal withholdings on the Schedule H. When I did that, the amount owed matched exactly the amount on the Schedule H prepared by my payroll company.
How do I make sure my Schedule H reflects the taxes withheld and the employer taxes already paid? I used a payroll company for my nanny and have already made all the required payments. I can't figure out how to enter the amounts I have already paid in Turbo Tax (all I can figure out is the federal income tax withheld, which I have already entered).
I’d request a Schedule H from your payroll company. Good luck!
When you enter the total amount paid the system will automatically compute the social security and medicare so you don't need to enter that. Only the income tax withheld which you already entered.
If you would like to view the schedule H before you file it in order to make sure that the numbers match the one that the payroll service created then - if you are using TurboTax desktop - you can just click the forms button in the top right corner and scroll down to schedule H.
If you are using the online version you need to finish your return and pay for the software and then you will be able to view or print your return BEFORE you file it. That will create a pdf of all of the forms and you can look at the schedule H to see if it all matches.
Did you get this issue resolved? I'm having the same exact problem and can't figure out how to have TurboTax take into account the taxes already paid to the IRS on my behalf from my payroll provider.
Yes, you are correct. The Schedule H only calculates what payroll taxes are due (social security/medicare/unemployment/income tax withheld). You will need to enter your payments separately as estimated taxes paid.
Enter your payments in the "Deductions & Credits" section using the "Estimates and other taxes paid" topic. Start/Revisit the "Estimated Taxes" topic and enter the dates/amounts of the quarterly payments made by your payroll company on your behalf.
I've been on this merry-go-round with the Schedule-H and filing employee and employer taxes.
You MUST file the full amount of annual taxes with your Form 1040. The schedule H instructions states this in a single line statement, so it is easily missed. Completing the Schedule-H form with TBTx calculates those taxes for you and allows for your state unemployment payments. It does NOT allow for the state withholding taxes on the form. My state, Virginia, requires me to pay withholding taxes on a quarterly basis, but the federal taxes, need to be withheld and paid with the Form 1040 filing.
Believe, me, I payed employee and employer quarterly federal taxes for two years, and also had to pay the entire tax amount with the Form 1040, Schedule-H submission. This was basically a "double-taxation". I finally had to hire a CPA to work with the IRS and develop a way to recoup/refund the quarterly takes I paid for two years. The process is slow, and I've currently been refunded for 2 of the 8 quarters.
Oto:
If you haven't resolved this issue, see my posting at the bottom of the thread.
This is my exact situation. We use Poppins Payroll for 1 Quarter in 2023. We paid all New York State unemployment taxes, other state taxes, and federal taxes already back in April/May 2023 when we closed out our account with Poppins. Poppins also provided me a pre-completed schedule H. The amounts paid already equal what's on the Schedule H exactly in some cases and almost exactly in others and match what TurboTax thinks I "owe."
However, I noticed the line on Schedule H that if I'm required to file a 1040 (I am) that I should NOT file schedule H but should use the info from their Schedule H on Schedule 2 and 3 instead.
TurboTax doesn't seem to have any way to enter the data from the Poppins Schedule H in Schedule 2 or 3. No clue what I'm supposed to do here.
Any advice on how people worked through this? Thank you so much.
Any
I used poppins payroll as well. I found advice that seemed to solve it for me by entering the total of the estimated taxes that you paid in the “Estimated Taxes” section of TurboTax. I think if I recall correctly I found this in the “other tax situations section. If the correct amount was paid, it will agree with the total tax listed on schedule H. If not, then you will pay the balance or get a refund as part of your tax due or refund received when you file your income tax return.
Thank you so much @amshroder
Did you just ignore the note on Schedule H that says you should use Schedule 2 & 3 instead if you’re filing a 1040?
Follow these steps to find Schedule H in TurboTax:
My guess is the IRS will flag the "estimated taxes" you entered, and come back with additional taxes owed. They did that to me in 2020, my first year of having domestic employment, when I didn't know how to account for the out-of-pocket taxes I paid and the employer. I filled in the estimated taxes I paid for each quarter, but the IRS basically discounted it and sent me a bill for additional taxes owed.
The IRS did this last year, 2023, three years after the 2020 filing. You can imagine my surprise ! 🙂
I'm not sure I read the instructions that way. The information on the Schedule -H does end up on the 1040 schedules also, but everything I read says if you file a 1040, you need to attached the completed Schedule-H with the submitted package.
TurboTax does have a few quirks with the Schedule-H which prevented me from E-Filing the 1040 and state forms. The IRS rejected my 1040 with my name as the employer, since it was not associated with the filed EIN number. When I set up the EIN, I used a "business name", as I though was required.
The issue is TbTx automatically puts your name from the 1040 info onto the Schedule-H as the employer. I had to "override" that entry and put in the business name, so it wold match the IRS records. TbTx flags the override and doesn't allow E-File submission. I had to mail in all the tax forms, federal and state.
After submitting my comment, I realized I may have been conflating my payment experience with yours incorrectly thinking they were similar, as far as the "estimated taxes" payments were submitted.
If you filed estimated tax payments throughout the year to cover the annual tax requirements based on the Schedule-H, I think you will be fine.
My experience was I filed quarterly tax payment as a business, and not associated with my personal 1040 tax requirements. The IRS sees personal 1040 requirements and business tax requirements completely different, and my tax payments under the "business" were never associated with my personal 1040 tax requirements.
Is there a better way to do it @scurling?
Had you used a payroll service to do the withholding etc? What was the difference in cost?
Ohh interesting - I see what you’re saying. It is confusing. I was kind of realizing the same thing yesterday re: separation of individual and business when I was finishing them yesterday. We will see what happens.
I owed more in 2023 but it was bc of some issue that impacted NY and TT users who file Sch H specifically. It was like $14 or something? I can’t remember exactly.