Babysitting Taxes

[Wbsahm15]

What is the name of your state (only U.S. law)? Oregon

I am trying to figure out the logistics of staying home with my daughter and babysitting one to two other children to generate income while I am home. Currently we are employing a nanny, and splitting the cost three days a week with another family, so I am somewhat familiar with nanny taxes, etc. we had to set up a BIN and become employers, paying employer taxes etc. my question is, what is required of me and the parents who will be paying me in terms of taxes? I only want to charge them $6 an hour, or possibly a flat weekly rate instead. How do they claim this for childcare tax credit, and how do I claim this as income? Do I need a new BIN, or can I use my current one, though I won't be an employer anymore? Any help around this topic is appreciated.

 

[Zigner]

What is the name of your state (only U.S. law)? Oregon

I am trying to figure out the logistics of staying home with my daughter and babysitting one to two other children to generate income while I am home. Currently we are employing a nanny, and splitting the cost three days a week with another family, so I am somewhat familiar with nanny taxes, etc. we had to set up a BIN and become employers, paying employer taxes etc. my question is, what is required of me and the parents who will be paying me in terms of taxes? I only want to charge them $6 an hour, or possibly a flat weekly rate instead. How do they claim this for childcare tax credit, and how do I claim this as income? Do I need a new BIN, or can I use my current one, though I won't be an employer anymore? Any help around this topic is appreciated.

Please keep your related questions in the same thread. It will make it easier for folks to help you. Thank you.

https://forum.freeadvice.com/landlord-tenant-issues-42/babysitting-out-rental-home-617858.html

 

[Wbsahm15]

It seemed like this was a very different topic than landlord/tenant issues... But I will post it there.

 

[LdiJ]

What is the name of your state (only U.S. law)? Oregon

I am trying to figure out the logistics of staying home with my daughter and babysitting one to two other children to generate income while I am home. Currently we are employing a nanny, and splitting the cost three days a week with another family, so I am somewhat familiar with nanny taxes, etc. we had to set up a BIN and become employers, paying employer taxes etc. my question is, what is required of me and the parents who will be paying me in terms of taxes? I only want to charge them $6 an hour, or possibly a flat weekly rate instead. How do they claim this for childcare tax credit, and how do I claim this as income? Do I need a new BIN, or can I use my current one, though I won't be an employer anymore? Any help around this topic is appreciated.

I am going to answer you here, because this is a clear cut tax question and does not relate to your other thread.

You would not use your BIN. (unless you misspoke and meant EIN number (Employer Identification Number rather than BIN.) You would simply file a Schedule C on your income tax return. There are pre set, per diem expense amounts (on a per child basis) that you can claim for meals and snacks, you can also claim an expense for the use of your home. In this instance you would not need to have a separate space in your home, but may claim the use of your entire home, based on the number of hours in the year that it was used to provide babysitting services. You can also claim any other direct expenses related to the babysitting.

You would provide each of your clients a simple piece of paper at the end of the year, with your Name, address, Social Security Number (or EIN if you choose to get an EIN) and the amount they paid you for that year. Obviously you will need to keep very good records of what child was with you and when, and the meals/snacks that you feed them.

Any profit that you have, after expenses, will be subject to self employment tax (both the employer and employee share of social security and medicare taxes) and regular income tax.

If you do not normally use a tax professional to handle your taxes, you might want to consider using one, at least the first time that you have to file a Schedule C.