Nanny Tax and Household Employee Guide

I employ household workers and need to understand my tax obligations.

Household employment details:
- Type of worker: [Nanny/Housekeeper/Caregiver/Gardener/Other]
- Annual wages paid: [Amount]
- Work schedule: [Full-time/Part-time]
- Provide room and board: [Yes/No]
- Worker age: [Under 18/18+]
- Worker is family member: [Yes/No]
- Number of household employees: [Number]
- State: [State]

Please explain:
1. Employee vs. independent contractor determination
2. Household employer threshold ($2,600 in 2024)
3. Social Security and Medicare taxes (FICA)
4. Federal unemployment tax (FUTA)
5. State unemployment requirements
6. Income tax withholding (optional vs. required)
7. Schedule H filing requirements
8. Form W-2 for household employees
9. How to set up payroll properly
10. Penalties for non-compliance
11. Dependent care FSA interaction