Question

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

1) A baby-sitter who earns $1, 300 a year
2) A nanny who earns $22,000 a year
3) The taxpayer would not have to pay Social Security and Medicare taxes in any of these situations.
4) A cook who is paid $35,000 a year
5) A cleaning lady who is paid $8,000 a year.

Answer 1

1) A baby-sitter who earns $1, 300 a year

Step-by-step explanation:

In the following cases, the Social Security and Medicare taxes are paid

1. Nanny earning $22,000 yearly

2. Cook salary $35,000 yearly

3. Cleaning lady salary $8,000

So, the first option is not required as according to publication number 926 of the internal revenue system, the annual payment would be exceeded than $2,000. If the annual payment is not exceeded the same would not be taxable.

Since the baby sitter earning is $1,300 yearly which is less than $2,000, so the same is not taxable.