If I want to privatly babysit, how DO I claim that income on next years taxes?

Question

The people I am going to babysit for want to claim what they pay me. Do I need to fill something out, or some kind of paperwork?

Answer 1

On next year's taxes you need to file a schedule C and a schedule SE (self employment tax). Both available at a public library or post office. Be prepared to owe a little over 15% of your babysiting money to SE tax, and your usual tax from income. This probably just means a smaller refund. You can use half of your SE tax as an adjust to your income on line 27 of the 1040.

For the child's guardians you need to give them a W-10 which is a statement that you provided child care for them, at whatever costs and has your social security number on it. You can download the form on irs.gov.

Keep in mind that if the guardians claim the dependent care credit they provide your SS# to the IRS, and the IRS will look for it on your return if you get audited. It is not a good idea to cheat the IRS.

By the way, if you make $400 or less the whole year babysitting you don't have to file either schedule. If you are right on the threshold it might be worth your while to reduce your rate just enough to bring it to $400 or less.

Check out and try to understand the sources below, publication 334 for small business, pub 17 general information and the w-10.

Answer 2

You need to keep accurate records of your income and expenses.

You'll file Schedule C or C-EZ with your tax return to account for the income and business expenses. If your total profit for the year is $400 or more, you'll have to file Schedule SE and pay the self-employment tax of 15.3% of the net profit from the business activity.

If this is your only source of income, you'll also need to make quarterly estimated tax payments using Form 1040ES. If you don't, you'll be facing a large tax bill at filing time, along with penalties and interest for underpayment of taxes.

Answer 3

You would file a Schedule C with your 1040 next year. Just beware of the self-employment tax-----15% of what you gross. If you are going to make a descent amount you'll want to file quartely estimated payments so that you don't get hit with any penalties at year end.