Good evening ladies! I am currently a lurker but hope to be joining the SAHM club very very soon. DH and I have a friend who is also looking for childcare in the near future, and if I stay home with our baby we are considering me babysitting her child to help her out and make a little extra income.
My question is for any of you who might have a similar arrangement. How do you pay taxes on your babysitting income? Do you claim yourself as being self-employed? I did some poking around on the IRS website but couldn't find a clear answer other than if you are self-employed, you have to pay taxes on any income over $400 (but of course they did not define what "self-employed" means).
If anyone could point me in the right direction or give me any info from your personal experiences, I would greatly appreciate it. Thanks so much for your time!
Re: Babysitting and taxes question
I watched my friend's little boy last year before we moved. I claimed the income and here are 2 reasons why. 1) If I claimed the income, then they could file for the childcare credit on their taxes and 2) We were able to write off a portion of household expenses as I was working from home. Our accountant had us send him the portion of square footage of our home used for "work" and prorated various utility bills for deductions as well.
I would speak to an accountant so that you can start tracking the expenses in a spread sheet to make it easier at tax time.
DD #2 - 03.13
I do in home daycare and I did my own taxes last year. I filed for a state business license (not a child care license, but a business) so my clients could use my EIN number for their taxes and I could write off any supplies I used. I also did not want to give out my SS# for their taxes. The business license was 75 bucks and well worth it for me with the amount of supplies I was able to deduct as expenses.
Ehow actually gave me an idea of all I would need to do as well as this lady's site:
https://stepbystepcc.com/tax.html
Good luck... Iove being able to stay home and DS loves his friends he has over to play with.
Thank you so much for these links, I will definitely check them out!
BFP 5/9/10. U/S - no heartbeat 6/2/10 (7 weeks). Induced miscarriage 6/7/10.
Chemical pregnancies 12/2/10, 1/3/11, and 2/7/11.
dx: RPL due to poor quality uterine lining; begin progesterone January 2011
BFP 3/10/11. EDD 11/19/11. E arrived 11/15/11!
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