This is my situation. My Mother in Law babysits my 4 year old and i pay her twice a month with a check or cash. Not much, total last year was about $1,920.
Will she have to file taxes to claim that? AND Can i claim what i paid her on my tax returns for last year??
Please, help! Thanks....
2007-02-06 08:00:20 · 4 answers · asked by CaliGirl 2 in Business & Finance ➔ Taxes ➔ United States
Legally, assuming you are not withholding social security and paying her the employer half, and giving her a W-2, yes she'd have to file, and pay self-employment tax of 15.3%. If that's her only income, she wouldn't owe any income tax on it unless she's filing a joint return.
If she claims it, then so can you, if the purpose of the child care is to allow you to work. You could actually claim it anyway, but if she didn't, it would end up coming back on her.
Many people in this situation just ignore the reporting requirements, especially when it's within the family. I'm not suggesting that you do that, since it's technically illegal.
2007-02-06 08:19:11 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
Your mother-in-law will be required to file taxes because she made more than $400 in what would be considered self-employed income. You can claim the expenses that you paid her on form 2441, dependent care expenses. You would need her Social Security number to complete the form.
2007-02-06 08:15:15 · answer #2 · answered by meditative scion 2 · 0⤊ 0⤋
NOT REQUIRED TO FILE IF INCOME WAS ONLY 1920 DOLLARS. (BUT IF SHE HAS ADDITIONAL TAXABLE INCOME OR CLAIMED AS DEPENDENT (MARRIED FILING JOINT RETURN) THEN IT SHOULD BE LISTED IF YOU CLAIM IT (ITEMIZED).
BUT YOU CAN CLAIM IT AS A DEDUCTION IF YOU ITEMIZE,.
2007-02-06 08:21:15 · answer #3 · answered by cork 7 · 0⤊ 0⤋
5100 and you can claim it if she does .
2007-02-06 08:05:25 · answer #4 · answered by territheterribleliar 4 · 0⤊ 0⤋