@Critter wrote:
Ok ... since you want to use either the day care credit form 2441 OR use up the FSA funds then the person you pay MUST declare the income on their return so they MUST complete a Sch C. The IRS allows you to take the tax deduction ONLY IF someone else is reporting it on your tax return. That is the only reason these tax deductions were allowed.
Critter, there is NOT such a requirement that is needs to be paid to a business.
As Hackinoff pointed out, all of the Nine Factors are looked at, and there isn't any one that is a determinative one. But both the IRS and Courts look at those Nine Factors, and when most or all of them are "no", the answer is pretty clear.
