When filling out a W2 for a household employee in which I want to cover their percentage of all the taxes, what should I enter in the varying wage boxes?
Let's say that over the course of 2014 I paid the individual $3500.00 and with held nothing. I'd like to cover their taxes and obviously my own. In preparing the W2 would the below be accurate...? I believe it's slightly off and that I would need to determine the 3500 in pay in addition to the taxes as the wages reported thus making box 1 equal to 3500 + (3500 * 0.1000) + (3500 * 0.0620) + (3500 * 0.0145).
Box 1 would be 3500 Box 2 would be 3500 * 0.1000 Box 3 would be 3500 Box 4 would be 3500 * 0.0620 Box 5 would be 3500 Box 6 would be 3500 * 0.0145
With that, what is the correct approach to achieve what I am after?
There seems to be confusion on what I am trying to do. Fundamentally I want to cover the household employees portion of taxes and then make sure the W2 matches accordingly. No this does not have to be with held but can be paid now, at the point of filing as noted by the IRS.
Social Security and Medicare Taxes (Federal Insurance Contributions Act – FICA) If you pay cash wages of $1,900 or more for 2015 (this threshold can change from year to year) to any one household employee, you generally must withhold 6.2% of Social Security and 1.45% of Medicare taxes (for a total of 7.65%) from all cash wages you pay to that employee. You also must pay your share of Social Security and Medicare taxes, which is also 7.65% of cash wages. (Cash wages include wages you pay by check, money order, etc.) Unless you prefer to pay your employee's share of Social Security and Medicare taxes from your own funds, you should withhold 7.65% from each payment of cash wages made.
Does anyone have direct experience with household employees that can offer factual advice to what I am trying to achieve?