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7 Answers

Do you have to claim babysitting money on taxes?

Asked by: Jesica Hogan 4389 views YA Discussion

I am a SAHM and I watch my sister in laws newborn for her for 60 a week as well as a friends child for 60 a week. This is such a little amount of money I am taking in for the week, I find it silly to have to pay taxes on it. So since this is babysitting money and not my business, will I have to put it on next years taxes? If so, should I start making reciepts for them, and how much would I have to pay in taxes?

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7 Answers

  1. Blake Z on Aug 19, 2011 Reply

    You are supposed to claim any earnings that amount to over 600 dollars a year on your taxes

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  2. tro on Aug 19, 2011 Reply

    you may not think this is a business but it is self employment and especially when you are doing for others than your relatives
    yes by all means you need to keep track of how much you make, report on Sch C and if the net amount(income less business expenses) is $ 400 or more you will pay self employment tax on the net, which is approx. 13.3% of that figure
    you may or may not have to pay income tax but the se has to be paid

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  3. Cathi K on Aug 19, 2011 Reply

    Yes it is income. You are making almost 500 per month which is 6k a year. You will pay self employment taxes of 13.3% (social security and medicare). It is not enough income to pay state and federal taxes unless you have other income or are married and there is another income.

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  4. the tax lady on Aug 19, 2011 Reply

    You aren’t charging enough.

    At any rate, have her pay you by check so you have proof you were paid.

    As a family member, you can argue that this is just income, but not a trade or business so you won’t be subject to the self-employment tax. Then you owe only income tax. (Note, under this argument, it’s not earned income for EIC purposes either.)

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  5. Judy on Aug 19, 2011 Reply

    YOU might find it silly, but that’s not how the IRS sees it. And by tax law, babysitting IS your business. Figure 15% at least.

    Whether you give them receipts doesn’t matter, but would be a good idea.

    You must report it if the total is over $ 400 for the year. If you file a return for any reason, including a joint return, you must report it no matter how little it is.

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  6. Lindsay Kendall on Aug 19, 2011 Reply

    This is not legal, but if your working for cash paid by both moms, then really, as long as they aren’t claiming on their taxes that they pay you for childcare, then i really don’t see the IRS getting any redflags on what your doing. I say this because the IRS is more interested in catching people evading large tax amounts or doing things that illegal on a much larger scale than what your talkin about. Plus, if they tried to find every single average person who scimps on their taxes, then they’d have to probably triple their employee number just to have enough investigators for the ton of leads they would have to pursue.

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  7. Talisman on Aug 19, 2011 Reply

    You might consider this idea: Go into one of those tax preparation offices in January or March (the months they are less busy) – and ask about your total tax situation. Here’s some of the topics you’ll need to ask them about:

    1) Self Employment
    2) Earned Income Credit (if you/your spouse have kids and income under $ 40k ish)
    3) Home Office
    4) Special rules for Food for day care.
    5) Quarterly tax payments
    6) Recordkeeping for expenses
    7) Licensing requirements – some states say no license for family, but licenese for more than 3 kids and CPR training required.

    Now, as another person posted, yes, the IRS has no way of knowing about your income, but you want professional advice in case you were ever audited, or need 40 quarters of social security contributions to qualify for social security, or if your EIC and other credits outweigh not filing at all.

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