@pasknyc wrote:
@Critter see posts above - yes Grandma is willing to pay more tax because she does not want the hassle of keeping meticulous expenses to later prove those to the tax authorities (it's a small enough amount in taxes that it's not worth the hassle). And in reality she is not running watching her grandchild as a business.
Reasonable expenses for a related child care (baby sitter) are almost NEVER challenged by the IRS. but yes, if deducted then records should be kept. But, there is no requirement to even deduct expenses, then no records are needed.
If she want's to avoid "hassle" then wait to see the hassle involved in a full fledged IRS audit for improperly reporting self-employed income under the wrong category.
You have gotten the advice from several regular forum posters, many of who are tax professional with many years of experience.
However, the advice that you receive over the internet should be taken for what it is. If you want an actual answer then make an appointment with a tax professional, EA, or tax attorney in you area that you can sit down with and can have all the facts.
in reality, the grandmother should do that, not you, because it is her income, not yours.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
