Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sally hires a maid to work in her home for $1,775 per month. The maid is 25 years old and not related to Sally. During

Sally hires a maid to work in her home for $1,775 per month. The maid is 25 years old and not related to Sally. During 2016, the maid worked 8 months for Sally.

Do not round immediate computations and round your final answers to two decimal places.

a. What is the amount of Social Security tax Sally must pay as the maid's employer? $

Over the years, the taxation and reporting of household employees' wages has caused many problems for taxpayers and the IRS. Congress addressed this problem by enacting what are commonly referred to as the "nanny tax" provisions. These provisions simplified the reporting process for employers of domestic household workers.

b. What is the amount of Medicare tax Sally must pay as the maid's employer?

Sally's employer's Medicare tax: $

c. What is the amount of Social Security and Medicare tax which must be withheld from the maid's wages?

Sally should withhold for Social Security and Medicare tax of: $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Evidence Based Audit In General Practice

Authors: Richard Baker, Robin C. Fraser MD FRCGP, Mayur Lakhani MRCP MRCGP DCH

1st Edition

075063104X, 978-0750631044

More Books

Students also viewed these Accounting questions