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If I work under the table as a baby sitter, is there a way that the parents can claim a portion of what they pay me without me having to pay a lot in taxes when we file?

Forum|Forum|6 years ago
June 1, 2019
11 replies
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I'm trying to help out my friend by watching her 4 children while her and her husband are at work. I am a stay at home mom and my husband claims me and our children as dependents. Is there a monthly limit or amount that she claim without me having to pay a lot in taxes? So she can claim the childcare credit but then I only have to pay a small amount or none at all in taxes when we file next year. I did it a few years back with my sister and I can't remember what the amount was or is.

Best answer by tpoock

There are a couple of issues that may affect you. If you are paid more than $2000 (in 2016) for the year, you may be considered an employee. If you are an independent contractor, that does not apply. The difference can be complex and you should seek personal assistance.

If you are an independent contractor, you need to claim all your income as self employment income. In addition, if you make more than $400 (from all sources), you will have to pay self employment taxes. That's a bit over 15%. (This is probably the limit you were looking for).

Those paying you can claim up to $6000 a year in Dependent Care Credit, if their children meet the age and other requirements.

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SweetieJean

Did you just post this same question under a different user ID? Do you babysit in the children's home or yours?.

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SweetieJean

Working under the table is illegal.

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slhmAuthor

No I didn't post it under a different id. I baby sit in my home and provide food etc.

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slhmAuthor

I wouldn't really consider it under the table. It's more like I am helping her so she doesn't have to pay an arm and a leg for childcare and has her kids in a stable environment. Both parents are active duty military and unfortunately we don't pay our military very well so they can't afford child care for 4 kids under 5.

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SweetieJean

You must declare what she pays you, even if she does not claim the Child Care Credit.

Critter

"my husband claims me and our children as dependents"

Your husband cannot claim you as a dependent so I hope you mean that you file a joint tax return which is the best way to file anyway.

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slhmAuthor

Yes that's what I mean. Thank you all for your answers. I think google was able to find me the information I was looking for on the irs website. <a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc756.html">https://www.irs.gov/taxtopics/tc756.html</a>

Hal_Al

That particular google/IRS link does not apply to you. It is for when you baby sit in the client's home (the so called "nanny tax"). Since you baby sit in your own home, you are considered a self employed child care provider. You have to pay you own social security and medicare tax at 15.3% of your net earnings. This is in addition to income tax. So expect to pay about 30% in tax. But you do get to deduct expenses, including some home expenses. See <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1934060-what-expenses-can-i-deduct-as-home-daycare-provider-when-i-don-t-have-daycare-state-license">https://ttlc.intuit.com/questions/1934060-what-expenses-can-i-deduct-as-home-daycare-provider-when-i-don-t-have-daycare-state-license</a>

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gerihoman

It is not illegal to work under the table. You have to file a 1099 at tax time on the money you made.

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tpoockAnswer

There are a couple of issues that may affect you. If you are paid more than $2000 (in 2016) for the year, you may be considered an employee. If you are an independent contractor, that does not apply. The difference can be complex and you should seek personal assistance.

If you are an independent contractor, you need to claim all your income as self employment income. In addition, if you make more than $400 (from all sources), you will have to pay self employment taxes. That's a bit over 15%. (This is probably the limit you were looking for).

Those paying you can claim up to $6000 a year in Dependent Care Credit, if their children meet the age and other requirements.