What is the maximum I can pay someone per year to work in my home without having to pay Social Security, federal unemployment taxes, or Medicare taxes?
If you paid a household employee less than $1,700 in 2011, you need not worry about Social Security and Medicare taxes.
Generally, you do not have to pay federal unemployment tax unless your household employees earn more than $1,000 per quarter. But the rules may get a bit complicated if you've also had household employees in the past, so read IRS Publication 926 for the lowdown. It's available on the IRS website at www.irs.gov or by calling 800-829-3676 and asking to be mailed a copy.