I pay her in cash, how do we claim that on taxes? do we need documentation? She is just a family friend, she doesn't have a special licencing for it.
2007-12-12 04:50:20 · 8 answers · asked by ralphnyvette@sbcglobal.net 1 in Business & Finance ➔ Taxes ➔ United States
The only documentation you need is her social security number. You get credited and she is the one that pays income tax on the amount. The amount is verified against her tax return, you should both match.
You may want to verify with her first that you each have the same amount recorded.
2007-12-12 05:12:50 · answer #1 · answered by Anonymous · 1⤊ 0⤋
You fill out a form 2441 showing what you paid her, and will most likely be eligible for a child care tax credit for some of it. You need to keep some record of what you've paid her - if you know how much you've paid per week, and how many weeks, that is OK.
You'll need her social security number to put on the form with her name and address, and she'll claim it as income on her tax return.
Some people in this situation don't report it on either side - that's illegal to do it that way.
2007-12-12 13:08:14 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Give your friend a form W-10 asking her for her name, address and SSN.
Whether or not you take a child care credit, this was income to her and she is supposed to report all of it on her taxes.
Also, how much did you pay her and where was the work done? If she watched your child at your house, you will be filing a W-2 (there are other issues as well if you paid her more than $1500); if she watched your child at her house, you should be giving her a 1099-Misc if you paid her more than $600.
2007-12-12 13:03:14 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Get her to write you receipts. IF for some reason she cannot claim the cash then your claiming the child care can back fire on her as taxable income. If you get her to give you receipts, if you get audited you have proof, otherwise since you pay cash, do you know exactly what you paid during the year? Did you keep track?
2007-12-12 13:00:37 · answer #4 · answered by belen2499 5 · 0⤊ 0⤋
You will have to have her ss# and reciepts for what you have paid. When you file you taxes there is a place to enter this information. Your friend will have to pay self employment tax on that money in our state that could be as high as 40%. I also know in our state you must be certified through the state to be a legal daycare provider.
2007-12-12 13:01:49 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Do you take taxes out and report them on a w-2 for her? If not then no, you cannot deduct this from your taxes. Also if you were to try to deduct this amount, she would have to also claim it on her taxes as income and pay the approptiate taxes.
2007-12-12 12:59:21 · answer #6 · answered by aylatroy 4 · 0⤊ 0⤋
write it off just ask hr block simple for them or get tax pro iam sure theres a colum in there for child care.
2007-12-12 12:58:14 · answer #7 · answered by Bart 1 · 0⤊ 0⤋
If you write it off she has to claim it on her taes....
2007-12-12 12:59:29 · answer #8 · answered by <3 epiphany 2 · 0⤊ 0⤋