Would babysitting qualify as a tax deduction?
I am not licensed but i babysat two little girls from sep to now. i made 900 all together to date. They used my home and food, would i qualify for a tax deduction???
Can someone expalin the procedure I would have to go about to explain why i deserve a deduction or would it be best if i went to a tax preparer?
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August 15th, 2010 at 10:14 am
Yes, you just file regular income tax forms (State & Federal) and explain why you want the government to give you a tax deduction on your earnings.
August 15th, 2010 at 10:24 am
So, with no licensing, you don’t really get to deduct anything for use of your home.
Report the income on schedules C (or C-EZ) and schedule SE. For $900, the SE tax would be $127. If this is your only income, there won’t be any income tax.
As for the licensing requirement for deducting use of home, here’s the info from IRS pub 587:
Daycare Facility
If you use space in your home on a regular basis for providing daycare, you may be able to deduct the business expenses for that part of your home even if you use the same space for nonbusiness purposes. To qualify for this exception to the exclusive use rule, you must meet both of the following requirements.
–You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves.
–You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. You do not meet this requirement if your application was rejected or your license or other authorization was revoked.
For food(also pub587)
Meals. If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. Claim it as a separate deduction on your Schedule C (Form 1040). You can never deduct the cost of food consumed by you or your family. You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates, later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. For more information on meals that meet these requirements, see Meals in chapter 2 of Publication 15-B, Employer’s Tax Guide to Fringe Benefits.
If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family’s food costs.
August 15th, 2010 at 11:17 am
You have income to report on Sch. C. You do not get to deduct for food or home expenses because you are not licensed. You can read up on the subject at http://www.irs.gov.
August 15th, 2010 at 11:20 am
Tax deduction for income? Huh-uh Have you paid tax on that income? If you kept records (and kept them on file) on those food expenditures, you might just report the lesser income caused by the expenditures. But I wouldn’t mention the expenditures on the return unless you can find such, expressly discussed, in the section on business costs.
August 15th, 2010 at 12:08 pm
You are self employed. You must file your tax return if your self employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). You can deduct food expenses. Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040).
August 15th, 2010 at 12:32 pm
Not being licensed has nothing to do with the issue of taking deductions for your expenses. Licensing is a state or county issue for which the IRS cares not a bit. Any amount of self employment income over $400 requires that you file a return. In most cases your legitimate expenses will offset that income which is reported on a Schedule C.
August 15th, 2010 at 12:58 pm
a tax deduction?
if you baby sat, you need to report it on a Sch C and if you have questions about what you can deduct you need to get publication 34 from IRS(call 1 800 829 3676, you can request one for free)
if you are single your non taxable income is $9350 and if you didn’t earn at least that you don’t need to file
except that as a sch C independent contractor, you need to pay your SE tax(approx 15.3% of your ‘net’ from Sch C)