Remember your Schedule H when filing your tax return
Learn what the form asks for and instructions for how to include it with your personal income tax return
At the end of each tax season (April for most filers and October if you need an extension), most Americans are busy preparing their personal income tax returns for the upcoming filing deadline. If you paid a nanny, senior caregiver, personal assistant, or other household employee $2,100 or more during the calendar year, you need to make sure your Form 1040 also has a Schedule H attached to it.
What is a Schedule H?
Schedule H is a form used to report your federal household employment tax liability for the year. According to the IRS, approximately 190,000 household employers nationwide file this mandatory form each year. It includes:
- The Social Security taxes you paid and withheld from your caregiver.
- The Medicare taxes you paid and withheld from your caregiver.
- The federal unemployment insurance taxes you paid.
- The federal income taxes you withheld from your caregiver.
What information do I need to fill out my Schedule H?
The form will ask you for the total wages paid to your household employee, the total amount of federal income taxes you withheld from them and the state unemployment insurance taxes you paid. You'll use these pieces of information to do various calculations as you make your way through your Schedule H.
Read more about the payroll and tax responsibilities you have as a household employer.
What happens after I follow all the Schedule H instructions?
Most online tax preparation software will walk you through entering the necessary data to complete your Schedule H - although you may have to pay extra for it. Once you're done, the total household employment taxes you paid for the year will show up on line 60a of the Schedule 4 if you check it prior to submitting. You'll attach both your Schedule H and Schedule 4 to your personal income tax return.
What if I forget to fill out a Schedule H?
If you fail to include a Schedule H with your personal income tax return, there will be confusion between the IRS and the Social Security Administration as to whether you have paid the appropriate amount of taxes. It is likely that you will receive notices from one or both agencies and could face penalties as well. It's possible that you will have to amend your personal income tax return once these headaches are sorted out, which requires even more of your time or more money to pay an Accountant or CPA to handle it for you.
If you're a HomePay client, we prepare the Schedule H for you at the beginning of the year so you can file it with your personal income tax return or hand it off to your Accountant or CPA if they are preparing your return for you.