Question

A taxpayer who employs household employees: A. Is required to pay federal unemployment taxes if he...

A taxpayer who employs household employees:

A. Is required to pay federal unemployment taxes if he or she pays more than $1,000 in cash wages to household employees during any calendar quarter.

B. Must withhold federal income taxes from the employee’s wages.

C. Must pay FICA taxes on cash payments of $1,000 or more during a calendar year.

D. Must report the employment taxes every quarter.

Business   Accounting   
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Homework Answers

Answer #1

Answer is A

Because:

If you paid cash wages to household employees totaling more than $1,000 in any calendar quarter during the calendar year or the prior year, you generally must pay federal unemployment tax (FUTA) tax on the first $7,000 of cash wages you pay to each household employee.

Why other options failed because.

1.It is not required to withhold federal income tax from wages you pay to a household employee

2.If you pay cash wages of $2,100 or more for 2018 (this threshold can change from year to year) to any one household employee then must pay FICA tax.

But not 1000 or more.

3. Unless and until if you have to pay FICA,FUTA no need to report the unemployment taxes every quarter

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