On January 3, 2015, Norman employed a part-time household worker in his home. He paid the household worker $400 per month for 2015. What amount of FICA taxes is Norman required to record on Schedule H?

Question

Quizplus · Accepted Answer

For 2015, an employer is required to pay FICA taxes of 7.65% on the first $118,500 of each employee's wages, which includes 6.2% for Social Security tax and 1.45% for Medicare tax. Since Norman paid the household worker $400 per month for 2015, the total wages would be $4,800 ($400 x 12 months). Norman is responsible for both the employer's and employee's share of FICA taxes, which means that he is required to pay 7.65% x $4,800 = $367.20 in FICA taxes for Norman's share, and an additional $367.20 for the employee's share. Therefore, the total FICA tax that Norman is required to record on Schedule H is $734.40 (which is answer choice D).

On January 3, 2015, Norman Employed a Part-Time Household Worker