I am wondering if I decide to babysit at home how do you report this income for taxes? Does this go towards social security?
2007-08-05 07:30:38 · 6 answers · asked by Samantha 3 in Business & Finance ➔ Personal Finance
You need to be a licensed daycare provider and it is a schedule C business. If your net earnings are over $400 you will pay both halves of SS and Medicare. You will give parents receipts and your tax id number or SS number so they can get childcare tax credits.
If it is only casual care most don't report it.
2007-08-05 07:37:39 · answer #1 · answered by shipwreck 7 · 1⤊ 0⤋
Yes, you should report this income.
Two reasons:
1. It's the law.
2. It will be reported as a childcare deduction by the children's parents, so the IRS will have a record of it. Bad news if you get audited.
Keep good records of your income from this job, as well as detailed records and reciepts for expenses that are solely for this job (new toys, snacks, blankets, high chairs).
When you file your taxes next spring, you will include the amount of income and can also deduct your expenses.
Depending on how much you earn, the tax forms will help you to determine how much you owe in taxes, if any. If you earn very little, it's possible that you won't owe for it.
A good rule of thumb is to put away 1/3 of the income that you make (in an interest bearing savings account) to pay taxes at the end of the year. This should easily cover what you owe, and you should have some left over, too.
Good luck!
2007-08-05 07:44:14 · answer #2 · answered by g-questions 3 · 0⤊ 0⤋
I don't know what state you live in, but I know that in the state I live in, if someone is babysitting they can get paid by the state, and with that they will give you documentation and information about taxes, etc. So you guys should maybe look into that payment method... But if you're not going to go about it this way, you may want to contact the IRS in reference on how to report taxes from this kind of babysitting payment transaction. I personally never knew anyone who did report for in home babysitting unless they had a daycare license... Hope this helps ;)
2007-08-05 07:41:40 · answer #3 · answered by About B 2 · 0⤊ 0⤋
It depends on how many kids you babysit and how much you are making. My mom babysits about 5 kids that aren't her own (not all at once, but throughout one week she'll have had them all) and she doesn't. I don't know if it goes towards social security though.
2007-08-05 07:34:56 · answer #4 · answered by sarah 1 · 0⤊ 0⤋
its babysitting, unless its ur job and ur living, it dosent need to be counted. there are millions of little kids under the working age that babysit. dont bother
2007-08-05 07:33:13 · answer #5 · answered by Phoebe 2 · 0⤊ 1⤋
you need to play games to keep an eye on the kids
2007-08-05 07:34:47 · answer #6 · answered by coachp. 1 · 0⤊ 1⤋