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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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"I am looking for the most economical method for doing payroll

Resolved Question:

"I am looking for the most economical method for doing payroll for a domestic employee in Massachusetts.
Typically agencies require about $500 to process just the tax. Is there something easy and cheaper to do this? Maybe an online service? Or does Federal and State online have accounts that assist with doing domestic house workers payroll.
Submitted: 3 years ago.
Category: Finance
Expert:  Megan C replied 3 years ago.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com. How are you today?

MyVirtualCPA :

If you don't want to process the tax on your own using paper and pencil, $500 for an annual service is about what you will have to pay

MyVirtualCPA :

You can do this for free by filling out the tax forms yourself

MyVirtualCPA :

There are no online accounts through the IRS or state agencies that will help you with Schedule H

MyVirtualCPA :

You could, however, ask local bookkeepers what they would charge to take care of the taxes for you - they may be willing to do this for less than $500 per year.

MyVirtualCPA :

It's not a time consuming task if you know what you are doing

Customer:

What forms do I need to do for federal and state? the income is approx. 2000/mo

MyVirtualCPA :

Based on that income, it does make sense to pay the $500 annually to get the taxes done. It is very time consuming if you do not know what you are doing, yet very easy if you do know what you are doing

MyVirtualCPA :

You need schedule H

MyVirtualCPA :

http://www.irs.gov/publications/p926/ar02.html

MyVirtualCPA :

And you will need to fill out form W-2 and W-3 at the end of the year

Customer:

what else? what is schedule H state fed?

MyVirtualCPA :

Yes, its federal

MyVirtualCPA :

for state, you will need to register and pay unemployment tax/insurance

MyVirtualCPA :

workers compensation

MyVirtualCPA :

and income tax

MyVirtualCPA :

http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/household-employment-tax-guide.html#three

MyVirtualCPA :

There's another good resource that outlines everything you need to do as well

Customer:

ty

MyVirtualCPA :

You're welcome. Is there anything else you need assistance with?

MyVirtualCPA :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 3 other Finance Specialists are ready to help you
Expert:  Megan C replied 3 years ago.
Thanks, Bill for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.