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If you employ housekeepers, cooks, or other domestic help, you must pay social security (FICA), Medicare, and unemployment taxes for those employees. FICA tax is due on a household employer's 1040 for wages paid to domestic employees via Schedule H.

To avoid underpayment penalties, you will have to increase your quarterly estimated payments or increase withholdings from your own annual wages to pay for these amounts due. There is an exception for annual cash wages of less than $1,500.

Federal unemployment taxes (FUTA) are due for any employees you hired during the year and to whom you paid $1,300 in cash wages in any calendar quarter this year or last year. Unless you also pay the appropriate state unemployment taxes, the maximum federal rate may be assessed.

These requirements don't apply to someone who is not your household employee. Certain employees under age 18, such as baby-sitters and yard workers, are exempt unless household work is their principal occupation.

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