My mother-in-law provides daycare for my child. I pay her and claim the money back from my FSA at work. I do not send her a 1099 or w-2. This is her only income, what form does she use and how does she report the income on the form?
2007-03-01 06:25:33 · 5 answers · asked by ckllrvlk L 1 in Business & Finance ➔ Taxes ➔ United States
Schedule C or C-EZ to account for the income and expenses and Schedule SE to calculate the Self-Employment tax.
2007-03-01 06:31:17 · answer #1 · answered by Bostonian In MO 7 · 4⤊ 0⤋
your mom-in-law declares the income (Sched. C) and pays income tax and self-employment tax (15.3%). Technically if it is over $600 you should give her a form 1099 - NOT A W-2 because she isn't an employee.
2007-03-01 16:05:55 · answer #2 · answered by ? 4 · 0⤊ 0⤋
Legally she should file a schedule C and a SE with a 1040. Her expenses should be pretty extensive such as:
All paper products, paper towel, Kleenex, toilet paper, napkins, etc.
food purchased for child, meals, snacks, drinks
linens, towels, sheets,
cost of detergent to wash linens, dishes
gifts
toys purchased
items purchased for her "business" like, crib, playpen, car seat, swing, any outside toys, gates etc.
Figure mileage on car when taking child to any appointments, school, etc. You kind of need to close your eyes and go through the day to figure all it costs to have a child in your home all day. I hope this helps.
2007-03-01 14:39:59 · answer #3 · answered by kattsmeow 7 · 1⤊ 1⤋
you should give her a 1099. But i believe she can file as self Employed. Go to www.irs.gov. It will help you find the right answer.
2007-03-01 14:34:10 · answer #4 · answered by Going Crazy 5 · 1⤊ 1⤋
I think you both need to claim it on your respective returns. She needs to claim it as income on her filing as other income.
2007-03-01 14:30:58 · answer #5 · answered by Devdude 5 · 1⤊ 2⤋