Hello.
I used Sure Payroll to pay my household employees, Sure Payroll withheld and paid all taxes to federal and state govenment and took these funds from my bank accounts. Sure Payroll send me a completed Schedule H. I took that data and recorded it on the Schedule H form on Turbotax. When I included Sure Payroll's Schedule H information on my Turbotax 2020 1040, the tax amount owed by me increased by the amount of the employee withholding. However, the withholding was timely actually paid by Sure Payroll to the relevant governments. Where do I show on my 1040 where these payroll taxes were already paid by Sure Payroll? Sure Payroll directed me to contact Turbotax.
Thank you.
In order to indicate the taxes you have paid already during the year for your household employee (or others), you need to:
1. Go to "Deductions + Credits" (on the top bar)
2. Select "Estimates and Other Taxes Paid"
3. Select "Estimates"
4. Under "Estimated Tax Payments", select the first option "Federal estimated taxes for 2020 (Form 1040ES)"
And there you can enter the payments you have made during the year (each quarter).
Thank you, Colleen.
I have done further research on this issue and have spoken to your tax colleagues at Turbotax. Where a payroll service collects and remits income and social security taxes on behalf of an employer of domestic employees, especially where that employer's payroll taxes are remitted through his separate household employer taxpayer identification number by the payroll company, no form H needs to be filed with the employer's 1040. To do so would result in double counting the taxes due to the IRS.
Similarly, as a separate tax identification number for the payroll taxes is used, trying to include the payroll taxes paid by the payroll company on the estimated payments section of the employer's form 1040 would result in incorrect estimated tax payment information on the employer's 1040. This is certain to trigger a payment error on the IRS's computer and repeated enquiries and audits from the IRS.