What item must be reported on Schedule H?

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Schedule H is specifically designed for reporting household employment taxes. When an employer pays a household employee, such as a nanny, housekeeper, or gardener, they have certain tax obligations under the federal tax laws. These obligations include reporting and paying Social Security and Medicare taxes, as well as Federal Unemployment Tax Act (FUTA) taxes related to household employment.

Household employers must report these taxes on Schedule H, which ultimately gets attached to their Form 1040 when they file their income taxes. This ensures that both the employers and the employees are in compliance with tax regulations regarding employment taxes in a household setting.

The other options do not belong on Schedule H. Investment income, sales tax, and interest income are unrelated to household employment taxes and are reported on different forms or schedules as applicable. For example, investment income is typically reported on Schedule B, and sales tax would not be reported directly on the individual income tax return, as it relates more to sales tax returns or claims for refunds.

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