Can you file income tax on self-earned income?

Question

Can you claim money earned from self-employment, such as babysitting, or is this non-taxable income?

Answer 1

New answer--old answer has entertainment value only, sorry for the confusion:

If you earned $0-399, report it as "other income"
If you earned $400 or more, report as self-employment. Contract law for minors doesn't apply, the IRS still calls it taxable.

If you earned $400 or more, you have to pay the self-employment tax, and so you'll have to do the appropriate scheduals the others have mentioned.

If you earned $400 or more, you are also now required to file a return. The zero bracket no longer applies to you. (Most people don't file a return until they've earned $8000 or more because they're in the zero bracket. You might be, too, but because you owe self-employment tax, you have to file.)

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Old answer:

You don't have a choice, you HAVE to report it.

Babysitting is taxable, you would record it as "other income", not as "self-employment" (unless you're licensed as a business). You could do a favor to the people you sit for by giving them your name, address and social so that they can deduct what they pay you--maybe you'll get a raise.

(Keep in mind that if your total income for the year from all sources combined is low enough, you don't have to file at all.)

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Judy usually gives good answers, I think she's one of our local IRS tax agents. I think she's wrong about this being self employment income, but I can't find a specific rule on that. This has more to do with minors running a business than it does tax law. I'm going to keep looking for something. If I'm right, you don't have to do schedual C, SE or the self-employment tax.

One answer above names you as an employee for the people you babysit for. This is wrong. You don't meet the definition of employee as far as the IRS is concerned.

Answer 2

All worldwide income is reportable. Generally, a casual "babysitter" is not an employee for tax purposes. If you were, your employer would be required to pay his share of your social security & medicare and to withhold federal taxes for you based on your w-4. If you're not an employee, but receive a 1099 form, than this is your reported income to the IRS. You'd be an independent contractor and have to pay 100% of your SS/Med. And depending on how much you made, you'd technically need to make quarterly payments to the IRS to avoid penalties. (Not enough detail to answer better--sorry!)

Remember, if you are not the dependent of another, you get your personal exemption amount and a standard (or itemized) deduction, so your tax liability could be zero.

General Rule: Income from any source derived is almost always taxable.

Answer 3

For filing a tax return, the IRS does not ask for any business license information. That being said, however, you need to get a business license issued by your state and/or municipality immediately. Doing business without a license is usually a violation of state and/or local laws, and the fines for doing so can be harsh. You may be also be in a business which requires the collection and remittance of sales tax in your jurisdiction. I would suggest that you make an appointment with a local accountant right away (don't wait until tax time) to make sure you are in compliance with all applicable laws.

Answer 4

Self-employment profit is taxable. The filing minimum for the self-employed is lower than for those who do not have self-employment income. If one has business profit of at least $400, filing is required.

Answer 5

You can claim it as income, though I can't think of anyone that does.

If you were to report it to the IRS as taxable income, the parents of the child could actually qualify for a tax credit.

Okay, okay, I wasn't trying to give bad advice. Judy is correct. If you earn over $400 you are required to file a SCH C. If this is your business, you really should do it.

My initial response was targeted for the thousands of teenagers or college students who make well over $400 a year in baby-sitting. Do you think they all file SCH C? Moreover, do you think that the IRS cares? Not just no, but hell No.

That being said, if this is your business you really do need to file a Sch C.

Answer 6

Any income from self-employment is subject to taxation. The IRS does have a section set aside called "Household Income" for people making less than $ 1,500.00, wherein you check the box and enter it on line 7; said income not subject to 15.3% FICA(social security) tax; and, unless you had other income putting you over the limit you would owe no federal tax at all.

Answer 7

You not only can, you are required to if it totals over $400 for the year.

You put the self-employment income on schedule C or C-EZ, fill out a schedule SE to calculate self-employment tax for social security and medicare, then use a form 1040.

Answer 8

All worldwide income is taxable no matter the source.

Answer 9

That would be considered taxable income. You file your income and related expenses on Schedule C.

However, many baby-sitters are considered employees. If you go to your customers' house to babysit, you should be considered an employee.