Reporting income for a temporary babysitting job?

Question

I did my sister a favor and agreed to babysit her two children for 2 wks @ $150/wk. She kept extending it, so I ended up doing 4.5 weeks (23 days) for a total of $680. Now she wants to claim the money for the childcare credit, which means I have to claim it as income (I did have a regular job also). This was NEVER mentioned before or after I started. I would never have agreed to $150/wk, knowing I'd have to pay taxes on it. After gas and tolls, my actual income was $75/wk. My husband and I are only due back $477 this year, fed + state combined. After adding the $680 "income", it will take away about $140 of our refund! And when all is said and done, I will only have made about 90 CENTS an hr for the babysitting! My sister does not even care. Do I have any legal recourse for her changing our agreement? How/where do I file this "income" on my taxes? Can I get a deduction for the gas, etc? Should I just forget it & file a 1040, rather than paying a tax preparer, which costs us more money?

Unfortunately, this started out as my sister asking me to do them a favor and watch the kids for just 2 weeks. She had been on maternity leave, but said she had to go back to work for 2 weeks (before starting her own daycare), otherwise her work wouldn't pay for her maternity leave. I agreed to $150/wk because they cried poor, and said they couldn't afford the previous sitter. I helped past the two weeks because her daycare license wasn't ready yet, but "it could come any day". Later I found the brand new truck in the garage. The whole thing is, they used me from the beginning. They gypped me on pay so they could make their truck payment, then decided to take more money out of our pockets by acting like this was a job. As I said, I NEVER would have agreed to do it for $150/wk had I known it'd net me 90 cents an hour in the end.

Answer 1

If she insists on reporting it, then you can file under Schedule C that you are running a babysitting business, claim the expenses you had to put out (gas, etc.) in order to earn that money, and chances are that you won't owe anything.

Also, for $10 or $20 you can buy TaxCut or some similar software program that should walk you through this. It'll be cheaper than a tax preparer for this level of refund, and you might actually find you get other monies back as well.

Oh, and finally, is she giving you a 1099 form? If not, you probably don't have to worry about it. And frankly, even if she did, at your level of income, you probably don't, but to be safe, you should file. But if she doesn't know your social sec #, and isn't filing a 1099, the IRS isn't likely to match it up.

Answer 2

It's too late to change things, so consider it an expensive lesson and move on. If you become bitter about it, you do yourself worse disservice...plus who needs the ulcers? You didn't make so much that I'd get a professional. File the schedule C-EZ and the Schedule SE. Think of all the legitimate expenses you can deduct and look for your receipts while you are thinking about it. You can find the forms and the books that give you the correct information on filling them out on the IRS website. The forms are PDF files so you need the Adobe reader (which you can also get for free at the Adobe website)

Answer 3

Dear Abby put it best when she said, "Nobody can take advantage of you without your consent." Of course you have no "recourse", you agreed to the "extenstion" of the agreement by showing up on her doorstep!

You claim the income and business expenses using Schedule C or C-EZ. Yes, your travel costs are legitimate business expenses. Since it's over $400 in self-employment income, you'll also need to file Schedule SE and pay the SE tax on the net profit.

Answer 4

Your sister really gave you the shaft. Aside from that, you should seek assistance from a professional. Following tax advice from this forum could get you into some trouble with the IRS, so it would be best to cover all your assets.

Answer 5

If she is claiming it you have to too, or you risk an audit and fines and penalties.

Because this is a second income and a second job, you are entitled to more deductions than your regular job affords. (like your mileage tolls etc). It may be worth your while to see professional about this if you can't figure it out yourself.

Taxes suk

Answer 6

Reporting Babysitting Income On Taxes

Answer 7

were you paid in cash, no receipt? Actually I would not consider it income, I would consider it a gift or reimbursement for expenses since it is your sister and you were not advised of it being income that was going to be taxed. Minimum wage is lot higher than 90 cents an hour if this was to be a job.. LOL

Answer 8

Do a Schedule C - then pretty much erase it all in expenses This will be a wash and you can mend your relationship with your sister and help her out without hurting you.

Answer 9

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