I care for a child in my home... do I have to claim it on my tax return next year?

Question

I will make $5000 by the end of the year watching a child in my home. Do I have to claim it or is there a certain amount you can make without claiming in Colorado?

Answer 1

If you make $400 or more in net (after expenses) self-employment income, you must file a federal income tax return and report it and pay, at the least, self-employment tax.

If you have Colorado income and must file a 1040, you must file a Colorado return.

Answer 2

You do need to claim it as income. Also, the poster was correct in suggesting that the parents will probably be looking for your social security number so they can get a child care credit on their tax return. The good news on all of this is that the IRS is much more generous in allowing deductions for a home business of child care. I strongly recommend seeing a professional tax preparer to file your return, otherwise you may miss some valuable deductions against income.

As a side note, please make sure that you have adequate liability insurance. Taking care of someone's child is a huge responsibility, and God forbid if something should happen to that child at your home.

Answer 3

Different states have different income tax laws but the Federal government has the same laws for everyone and yes you do have to claim any and all income on your tax returns.. now there may be tax credits or something like that but IF IT IS INCOME YOU HAVE TO CLAIM IT" especially if who you are sitting for deducts it on their taxes..

Answer 4

The child's parents will probably want to write the amount of money they've given you on thier taxes. So you will have to provide that to them and then that leaves you with the income to report.

Answer 5

It is reportable and taxable, net of your direct expenses. Your "customer" or "client" will probably need to report your tax ID number on their own tax return to get the child care deduction.

Answer 6

The solutions given by using Boston and Judy above are dazzling. What you will desire to do is be sure who can declare you as a based below the IRS rules for doing so. human beings can not in basic terms come to a variety between themselves (different than below very constrained circumstances) who will declare a dependency exemption. the stairs are that first you will desire to look on the guidelines for being a qualifying baby (high quality controls) of your mothers and fathers. in case you meet those rules, you may not declare your self. in case you do no longer meet the high quality controls rules, you will desire to then seem to work out in case you meet the definition of a qualifying relative (QR) on your mothers and fathers. returned, in case you meet those rules you may not declare your self. in case you do no longer meet the two the high quality controls or QR assessments, your mothers and fathers can not declare you. based on your message, you need to be a high quality controls on your mothers and fathers. As stated above, you look to fulfill each and all of the standards to be a high quality controls, with the potential exception of the help attempt. Take the suggestion given by using Boston & Judy and circulate down the help attempt rules which contain your mothers and fathers. the effect of that attempt will come to a variety, on your case who can declare you. As an extra observe, you earned too lots in 2007 to be a QR. the subject will turn on the high quality controls assessments.

Answer 7

You have to claim it. Theoretically you have to file even if you have no income.

Answer 8

turbotax.com or irs.gov....they should have the answer