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2boys1girl
and one more girl on the way!
Member since 5/10 2954 total posts
Name:
D
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Babysitters and Taxes
How would you feel about this? I know I'm probably at fault for not asking these questions.
We use a woman in our town who watches children out of her home. She is a certified school teacher turned SAHM. We were referred to her by a friend well over a year ago. She watches a few children out of her home and runs the same guidelines as a facility.
She has been watching our daughter for over a year and had asked me for cash since the beginning being her banking institution was far and it was more convenient for her. I asked her the other day what was the information so that I can claim my child care tax credit and she told me she does not report this income and pretty much im sol (in a nice way lol)
We have paid her over $12,000.00 this year and I would have received 1,000.00 back on my tax return refund for it so I'm pretty bummed. I know it's my fault for not clarifying this earlier on but how would you feel?
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Posted 1/17/13 12:05 PM  |
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Long Island Weddings
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MrsPJB2007
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Member since 7/06 12020 total posts
Name:
MJ
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Babysitters and Taxes
You would only have been able to claim up to $3,000 per child on the taxes.
Maybe see if she would be willing to let you put that you paid her $3,000 on the taxes for your daughter. She probably will not want to but it's worth a shot. You would have to use her SS# and it would show that she earned $3000 as a "self-employed" person and she would owe taxes on this amount.
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| Posted 1/17/13 12:10 PM |
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JsWife
His laugh, Her smile
Member since 12/06 2902 total posts
Name:
Patricia
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Re: Babysitters and Taxes
I think it was implied this arrangement was off the books. Sorry.
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| Posted 1/17/13 12:15 PM |
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2boys1girl
and one more girl on the way!
Member since 5/10 2954 total posts
Name:
D
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Re: Babysitters and Taxes
Posted by MrsPJB2007
You would only have been able to claim up to $3,000 per child on the taxes.
Maybe see if she would be willing to let you put that you paid her $3,000 on the taxes for your daughter. She probably will not want to but it's worth a shot. You would have to use her SS# and it would show that she earned $3000 as a "self-employed" person and she would owe taxes on this amount.
I have 2 boys also I pay for after school care so that's where I get the 1,000.00 refund figure from based on 3,000 for them and 3,000.00 for my daughter. Either way she was pretty stern on the fact she doesnt report this income what so ever....and I know she probably makes more than me if she charges the other 5 parents what she charges us weekly. Just frustrated cause I really could have used that money back. I know paying anyone cash consitutes under the table...just venting i guess.
Message edited 1/17/2013 12:17:15 PM.
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| Posted 1/17/13 12:16 PM |
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jambalady
Is it summer yet?
Member since 8/06 7392 total posts
Name:
Holly
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Re: Babysitters and Taxes
Posted by JsWife
I think it was implied this arrangement was off the books. Sorry.
\
I agree.
I did a lot of research on babysitter taxes, and it's a 2 way street.
In order to claim your child care credit, you would have had to pay her on the books.
Cash is fine, but you need an Employee ID number, and you as the Employer may have to pay and withhold Social Security and Medicare taxes, pay federal unemployment tax, and Worker's Comp.
You may also have to withhold her taxes for her.
So, if she was making $XX/hr, you would have to figure out what her withholdings should be and pay her net amount and provide an end of year tax withholding statement for her.
Here is a good article on claiming taxes.
Nanny Taxes
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| Posted 1/17/13 12:48 PM |
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NervousNell
Just another chapter in life..
Member since 11/09 54921 total posts
Name:
..being a mommy and being a wife!
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Re: Babysitters and Taxes
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
Message edited 1/17/2013 12:49:59 PM.
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| Posted 1/17/13 12:49 PM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Re: Babysitters and Taxes
Posted by JsWife
I think it was implied this arrangement was off the books. Sorry.
This.
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| Posted 1/17/13 12:52 PM |
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Onemoretime
LIF Adult
Member since 9/12 1077 total posts
Name:
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Re: Babysitters and Taxes
Usually, sitter out of home is off the books. I'm surprised you didn't ask about this before you paid her. I would have assumed off the books.
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| Posted 1/17/13 1:28 PM |
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ali120206
2 Boys
Member since 7/06 17796 total posts
Name:
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Re: Babysitters and Taxes
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
You can claim it for licensed in home centers or sitters that you pay on the books (our friends went through the process of having their nanny on the books).
If it wasn't discussed in the beginning, I too would assume it was an off the books agreement. Usually "off the books" arrangements for daycare end up being cheaper than if you could claim it anyway so you are still ahead.
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| Posted 1/17/13 1:39 PM |
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2BadSoSad
LIF Adult
Member since 8/12 6791 total posts
Name:
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Re: Babysitters and Taxes
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
I agree, I thought they needed to be operating as a registered daycare facilty (even in home) with a tax ID #
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| Posted 1/17/13 1:40 PM |
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MrsO
Big Brothers to Be
Member since 1/07 4521 total posts
Name:
Maureen
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Re: Babysitters and Taxes
Posted by 2BadSoSad
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
I agree, I thought they needed to be operating as a registered daycare facilty (even in home) with a tax ID #
No if it is an individual you just need there social security number. If it was an inhome center you could give them a 1099, but if they are just working for you then you would need to give them a W-2 and pay social security and medicare taxes, unemployement insurance, etc.
It isn't cheap either way.
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| Posted 1/17/13 1:59 PM |
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MaZz
* Lovin my baby girl!!! *
Member since 2/09 6243 total posts
Name:
Gina
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Re: Babysitters and Taxes
If she asked for cash from the getgo, you should have assumed she wasn't going to report it... You should have asked for her info in the beginning. I feel it's lesson learned... If you need a different nanny at some point down the road, then you can specify that she would be on the books.
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| Posted 1/17/13 2:02 PM |
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2boys1girl
and one more girl on the way!
Member since 5/10 2954 total posts
Name:
D
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Re: Babysitters and Taxes
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
It was 1,000.00 I already did my taxes both ways to see the difference in the refund.
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| Posted 1/17/13 4:05 PM |
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Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
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Re: Babysitters and Taxes
Posted by 2boys1girl
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
It was 1,000.00 I already did my taxes both ways to see the difference in the refund.
That's just the effect on your actual tax return.
You also need to take into account that you have to pay payroll taxes (medicare, social security, unemployment) on her earnings. The overall net cash-flow effect would be much less.
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| Posted 1/17/13 4:24 PM |
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NervousNell
Just another chapter in life..
Member since 11/09 54921 total posts
Name:
..being a mommy and being a wife!
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Re: Babysitters and Taxes
Posted by MrsO
Posted by 2BadSoSad
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
I agree, I thought they needed to be operating as a registered daycare facilty (even in home) with a tax ID #
No if it is an individual you just need there social security number. If it was an inhome center you could give them a 1099, but if they are just working for you then you would need to give them a W-2 and pay social security and medicare taxes, unemployement insurance, etc.
It isn't cheap either way.
OK so if you woudl have went this route you would have had to pay SS and medicare taxes, unemployment insurance, etc?
So that to me would negate any savings on your tax return from claiming it.
I think you made out ok....
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| Posted 1/17/13 4:26 PM |
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MrsPJB2007
MBA at your service!
Member since 7/06 12020 total posts
Name:
MJ
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Babysitters and Taxes
Just to clarify....
You don't necessarily have to give an individual a 1099. If you pay someone cash "off the books" for babysitting and they agree to let you report it on the taxes using their social security number, what happens is they will have to file a Schedule C for self-employed individuals and pay SE (Self-Employment) taxes on the amount. She would be responsible for her SS, medicare, federal taxes on the amount.
The problem with this is that no one wants to pay the taxes and it would be hard pressed to find someone who is willing to do this at all. For example $3,000 on a Schedule C would probably wind up with a SE tax of say $600-700.
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| Posted 1/17/13 4:34 PM |
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BargainMama
LIF Adult
Member since 5/09 15660 total posts
Name:
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Re: Babysitters and Taxes
Posted by JsWife
I think it was implied this arrangement was off the books. Sorry.
Ditto, especially given that you were paying cash.
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| Posted 1/17/13 5:40 PM |
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BargainMama
LIF Adult
Member since 5/09 15660 total posts
Name:
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Re: Babysitters and Taxes
Posted by NervousNell
Posted by MrsO
Posted by 2BadSoSad
Posted by NervousNell
I thought you couldn't claim it on your taxes for in home daycares and sitters?
I thought it was only for facilities??
Either way , it's next to nothing.
It doesn't change your taxes all that much...it's peanuts what you can get back.
I agree, I thought they needed to be operating as a registered daycare facilty (even in home) with a tax ID #
No if it is an individual you just need there social security number. If it was an inhome center you could give them a 1099, but if they are just working for you then you would need to give them a W-2 and pay social security and medicare taxes, unemployement insurance, etc.
It isn't cheap either way.
OK so if you woudl have went this route you would have had to pay SS and medicare taxes, unemployment insurance, etc?
So that to me would negate any savings on your tax return from claiming it.
I think you made out ok....
No, you don't have to pay all those taxes for a babysitter. They pay their own taxes. They claim the babysitting income as their own, you claim it on your taxes as paying them under the childcare area with their social. The babysitter is not an employee of yours. So you don't pay those taxes. My sister babysits out of her home and claims the income on her taxes. Not as a business. As an individual. Now an in home nanny who is your employee, different story.
Message edited 1/17/2013 5:43:56 PM.
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| Posted 1/17/13 5:42 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
Name:
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Re: Babysitters and Taxes
Posted by JsWife
I think it was implied this arrangement was off the books. Sorry.
I agree with this.
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| Posted 1/17/13 5:50 PM |
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SummerMom
Now a mom of 2!
Member since 6/07 4970 total posts
Name:
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Re: Babysitters and Taxes
Posted by Mrs213
Posted by JsWife
I think it was implied this arrangement was off the books. Sorry.
I agree with this.
Definitely. She's not paying income tax on the cash she gets from you, so you don't get to claim those expenses as a deduction. The government isn't going to give you cash back when they're not getting anything in return.
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| Posted 1/17/13 9:11 PM |
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