Starting in 2014, President Barack Obama’s health care law will expand coverage to some 30 million uninsured people. At the same time, insurers no longer will be allowed to turn away those in poor health, and virtually every American will be required to have health insurance — through an employer or a government program or by buying it on their own.
Tag: home health care
Submerged Government Assistance
Suzanne Mettler and John Sides write in their NY Times article that 96% of Americans have relied on government assistance. This includes the deduction for mortgage interest and tax free employer paid health insurance. They call these submerged government social policies. In my opinion, these are the two most likely tax benefits that we will lose in order to balance the federal budget. They also note that ideology determines whether we label government policies as used by producers or moochers.
The Nanny Tax
In January 1993, Clinton’s nomination of corporate lawyer Zoë Baird for the position of attorney general came under attack after it became known that she and her husband had broken the law by employing two illegal aliens from Peru as a nanny and chauffeur for their young child. They had also failed to pay Social Securitytaxes for the workers until shortly before the disclosures. While the Clinton administration thought the matter was relatively unimportant, the news elicited a firestorm of public opinion, most of it against Baird. Within eight days, her nomination lost political support in the U.S. Congress and was withdrawn. (Nannygate)
Do you have a Nannygate problem? Employing undocumented workers is not the critical issue here, it is the non payment of employment taxes for services provided in your home by an employee.
From IRS Publication 926: It is unlawful for you to knowingly hire or continue to employ a person who cannot legally work in the United States. You must complete a Form I-9 on each person that regularly works for you.
If you will pay cash wages of $1800 or more to any one household employee, then you need to withhold and pay social security and medicare taxes and give that employee a Form W-2. State and federal unemployment taxes may be due, also.
Household Employer’s Checklist
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| When you hire a household employee: | □ Find out if the person can legally work in the United States. □ Find out if you need to pay state taxes. |
| When you pay your household employee: | □ Withhold social security and Medicare taxes. □ Withhold federal income tax. □ Decide how you will make tax payments. □ Keep records. |
| By January 31, 2013: | □ Get an employer identification number (EIN). □ Give your employee Copies B, C, and 2 of Form W-2, Wage and Tax Statement. |
| By February 28, 2013 (April 1, 2013, if you file Form W-2 electronically): | □ Send Copy A of Form W-2 to the Social Security Administration (SSA). |
| By April 15, 2013: | □ File Schedule H (Form 1040), Household Employment Taxes, with your 2012 federal income tax return (Form 1040, 1040NR, 1040-SS, or Form 1041). If you do not have to file a return, file Schedule H by itself. |