is this fair? updated

I thought that I was getting paid "off the books" for a babysitting job....but I just found out that the person is going to claim the amount she pays me on her taxes (meaning that I will have to pay taxes on that income).

So, I will have to raise my price 45% in order to make what she had agreed to pay me, (when we were talking about paying me cash and off the books....)

Is that fair of me?

Message edited 8/2/2007 12:41:43 AM.

Re: I thought that I was getting paid "off the books" for a babysitting job...

how can she do that without having you fill out certain forms?

Re: I thought that I was getting paid "off the books" for a babysitting job...

Ouch... she should have let you know that.

Message edited 8/1/2007 12:15:00 PM.

Re: is this fair?

that sux!

Re: I thought that I was getting paid "off the books" for a babysitting job...

Did you give her your SSN or Fed ID (if you're a business)?

If not, I'm not sure how she can claim the babysitting on her taxes.

Or, is she submitting a claim against a dependent care FSA plan? She's still need your SSN and if you don't give it to her, she can't submit the claim. You're not required to give her your SSN if you don't want to.

How old are the kids? For an FSA plan, they have to be under 13.

Re: is this fair?

Re: is this fair?

Sorry girls, I hit post too soon. LOL.

She just sprung this on me 3 weeks before I am supposed to start watching her boys. I typed her a long email explaining that I cannot watch her two little ones for only $150 a week, which is what I will be making if I have to pay over 45% in taxes (15.3% social security, 6% CT state tax and about 27% federal).

I am sooo scared of what she will say.

ETA: She will probably ask me for my SSN next year when she files her tax return.

My dad is a CPA luckily so he's helping me with all of this.

The funny thing is, by claiming this and getting the deductions/child care credits, she is actually going to be spending MORE money by having to pay me more than she will get back in return. (did that make ANY sense? ) Basically she would save more money by just doing it off the books, but oh well.

Message edited 8/1/2007 12:22:07 PM.

Re: is this fair?

she's under the impression that you will work for the same amount.

You definitely need to work this out now.

Good luck.

Re: is this fair?

Posted by ~Melissa~

The funny thing is, by claiming this and getting the deductions/child care credits, she is actually going to be spending MORE money by having to pay me more than she will get back in return. (did that make ANY sense? ) Basically she would save more money by just doing it off the books, but oh well.

Re: is this fair?

Uh, legally, wouldn't you have had to report that income and pay taxes on it, anyway?

(ETA - I do agree to ask for more money is fine at this point since she is changing the deal so-to-speak.)

Message edited 8/1/2007 1:00:38 PM.

Re: is this fair?

Posted by Kara

Uh, legally, wouldn't you have had to report that income and pay taxes on it, anyway?

Re: is this fair?

I gotcha. I'm just saying she could very well come back and respond that way. But see what she says first! No harm in asking.

Re: is this fair?

is she "forming a company" and wanting to enlist you as an employee? If not and she does claim you, you need to fill out a W-4 like form...I think its called a 1099. If she's not taking tax out in advance - which she doesn't have to do to claim you, i believe - then you need to pay the government quarterly on your own. just as long as you give them something you should be fine but if you give nothing and then she claims you, you'll get fined. I received this info from a friend who does a lot of freelance work. I've never checked it out first-hand myself though.

having said that, i will say that DH works off the books and there are disadvantages to it.

Re: is this fair? updated

update:
she's paying me off the books. phew.