Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 01-15-2015, 07:05 PM
Junior Member
 
Join Date: Jan 2015
Posts: 2
Babysitting

If I got paid for babysitting all year long do I claim it as taxable income or do I have to claim it as business income



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-15-2015, 08:12 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by Jpost View Post
If I got paid for babysitting all year long do I claim it as taxable income or do I have to claim it as business income
I guess it at all depends entirely on where the care takes place and who provides it.; unless you work for an employer and receive an W2 by jan 31 next year and if your babysitting earns you $400 or more, you're self-employed. Then, you need to file Sch C / SE with your tax return. However, it's entirely possible that you could end up erasing your earnings by completing Sch C. This form reports what you earned, but it also allows you to take deductions from that income for business expenses. For example, if you advertised your services at some point during the year or had business cards printed, these costs are deductible. Likewise, if you purchased toys or games to amuse the children in your care, or if used your home to provide child care, you can take deductions for these things. Depending on your income, the deductions might exceed what you earned, resulting in negative income. You'd still have to file Sch C, but it would show a business loss. Unless you are a student under the age of 18 or a self employer as mentioned above, you may be required to be hired as an employee and your employer withholds taxes from your paychecks. Babysitter as Employee
If the person you babysit for has the right to control what you do, when you do it and how you do it, you might consider that person to be your employer. If you work as an employee, the person you work for should provide you with a W-2 detailing how much you were paid during the year, as well as how much money was withheld for such things as fica taxes, or etc You should report your babysitting earnings on W-2 earnings on Line 7 of Form 1040
Then, your employer must have you fill out an I-9 form that certifies your work status, as well as a W-4 form so your emoployer 'll know how much tax to withhold from your paychecks. Your employer may make regular estimated tax payments of your tax liabilities, increase withholding tax at work, or risk being assessed an underpayment penalty when your employer files Sch H with his 1040 tax return the following spring. Sch H is the annual return for household employers. Your employer will also be required to provide W-2 forms to you and federal government, as well as paying the employer's matching FICA tax, federal unemployment tax and possibly state unemployment tax.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Help! Babysitting income Lei57 Income 1 03-12-2012 07:32 AM
Grandma is babysitting stallters Income 1 02-21-2011 07:45 AM
Is Babysitting considered Child Care?! dechaine10 Income 1 02-03-2011 01:59 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.