babysitter??

mlandwehr

so i went to meet with a babysitter tonight and i over all really like her. The only thing is i don't know how i feel about her not claiming it on her taxes, cause then i cant. It will be almost $5000 in a year that i spend on child care that i can't claim. Have you guys had a baby sitter that didn't and what did you think?

KHadden26

i havent had a babysitter, but I'm personally a yoga instructor and when i get private clients that pay me in cash, I also don't claim it.  It's hard to make money with jobs like that and then to have taxes taken out is painful -- plus being an independent contractor like that means no benefits.  So I would understand...but only because of the job situation I have.  I think prior to being a yoga teacher I wouldn't have understood...

mlandwehr

KHadden26:

i havent had a babysitter, but I'm personally a yoga instructor and when i get private clients that pay me in cash, I also don't claim it.  It's hard to make money with jobs like that and then to have taxes taken out is painful -- plus being an independent contractor like that means no benefits.  So I would understand...but only because of the job situation I have.  I think prior to being a yoga teacher I wouldn't have understood...

 

I 100% why she wouldn't. FTM and not sure how much of a difference it makes to claim and not to claim.   

RovinChick

$5,000 year sounds cheap to me, so I wouldn't care! LOL  If you want someone that reports their income, you will most likely pay more to make up that difference anyway.  Depending on what your effective tax rate is (look at your tax return and divide the amt of taxes by your income), you might only be saving around $350/yr anyway (based on a 7% national avg effective tax rate).

llbta85

Do you mean up to $5,000 for the child care credits?  In that case, have you made sure that you even qualify and aren't phased out?  In the event that you aren't phased out and it will make a difference you can always 1099 this person and then leave it up to them to claim it on their end.  If this is more of a nanny issue this may become an issue later on, for example, if she trys to claim unemployment if the relationship ended you could come under fire.  I am always hesitant to do business with people who openly refuse to claim income, but that's just me...

mlandwehr

no its is really cheap. I only need 3 days a week, so it will be 100/week for her. I just wanted some one your input thats you ladies

ckettenb

We don't claim our nanny. It sucks.

jmcgra06

I wouldn't worry about it for the taxes as much as the other liabilities. We had a friend who lost her job and then had to fire her nanny as a result. They gave her a little severance money, but the nanny went to file for unemployment and soon after that the IRS called and they had to pay fines, interest and back taxes on the whole mess. Also something to consider - if you claim your nanny properly and she falls or hurts herself while working, your home owners insurance is more likely to cover it. I paid taxes when I was a nanny 20 hours a week in grad school, and I wound up getting it all back in April because my income was still too low, so that is something to consider.

You can't consider the nanny a 1099 contractor because of the rules of the IRS - it's W2 or nothing