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  1. #1
    April8201 Guest

    Babysitting in my home

    What is the name of your state? IL

    Does anyone know the laws about claiming income when you babysit from your home? I would like to start watching a couple of kids in order to be at home with my own child, but I don't know if I would have to claim it on my taxes or not. I am not planning on becoming licensed right now. Thanks to anyone who can answer my question.
  2. #2
    Snipes5 is offline Senior Member
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    All income is taxable, whether you are licensed or not.

    Keep careful track of your expenses and income. Claim both on a Schedule C.

    The IRS looks very carefully at anyone who claims self employment income but no expenses.

    Snipes
  3. #3
    JETX is offline Senior Member
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    Also, be very careful about your licensing 'issue'. Lots of states are revising their day care licensing requirements.
  4. #4
    Jenni_Pooh2 is offline Member
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    Why are you not interested in getting licensed? If you are going to be watching children in your home, it's best if you are licensed. It protects you and the children you are caring for.
  5. #5
    JETX is offline Senior Member
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    Oh, and lets not forget about the extra insurance requirements for your child care business.
  6. #6
    April8201 Guest
    Thanks to everyone who responded. The reason I am not interested in becoming licensed at this time is because I am planning to watch my friends kids while she goes to work. I don't have enough room at my house for a lot of kids so it would just be her 2 and my 1 so there is no sense in becoming licensed. I do have 3 years childcare expirience though so I do know what I am doing. Can I still claim expenses even though I am not licensed and it is not a business or is it a business because I would be earning income. Sorry this is all new for me and I am a little confused on all the tax laws. Thanks again
  7. #7
    abezon is offline Senior Member
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    It's a business & you have to declare the income. However, in order to take expenses against the income, you must be operating a legal business. If running an unlicensed day care is a crime in IL, you won't be able to claim any expenses. If being unlicensed is just unlawful but not criminal, you can claim all reasonable & necessary expenses.

    However, you will NOT be insured if one of those kids gets hurt on your property. If a friend visits you & is injured, your house insurance covers the medical bills. But every insurance company I've heard of excludes day care activities from coverage unless you have a special day care rider. How likely is it that a kid will get hurt? Gee, how many of us have scars from crashing into the fireplace hearth/coffee table/steps/dog? Can you afford to pay for plastic surgery out of pocket?
    This post does not constitute legal advice, nor does it create an attorney-client relationship. Postings are based only on the information provided and you should consult an attorney in your area before relying on information contained in this post.
  8. #8
    Jenni_Pooh2 is offline Member
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    Since you are not interested in being a licensed daycare, you do need to get insurance to cover those kids while they are in your home. If you are renting the home, be sure to clear all this with your landlord as well as you are making the land lord also liable. I strongly suggest that you find out what the licensing requirements are in your state. The penalties can be steep for not getting a license when you are required by law to do so.

    Also, talk to your friend, wouldn't it be easier to go to her house to watch her kids?

    FYI... if you are looking to claim the expenses as a business related expense, you will have to provide the parent with a 1099 as well as pay self employment taxes.
    Last edited by Jenni_Pooh2; 02-26-2004 at 08:28 AM.
  9. #9
    Snipes5 is offline Senior Member
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    She does not have to give the parent a 1099. If she works in her own home, she gives the parent her full name and SSN.

    If she works in the parent's home, THE PARENT gives her a 1099 if her income is below a certain threshhold, and a W-2 if it's above.

    Most states, in fact, do not require daycare to be licensed in any way.

    Snipes

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