Level 2

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I got paid cash for babysitting, how do i file

Forum|Forum|7 years ago
May 31, 2019
10 replies
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Best answer by Hal_Al

They do not need to give you a W-2, even for them to claim the dependent care credit (DCC). Since you sat the kids in their home that makes you a household employee and not a self employed person. But because you are the parent, of the taxpayer, you are exempt from the "nanny tax". That is they don't have to pay social security and medicare (FICA) tax and neither do you.

You will file the income as a Household employee. The money goes on line 7 of form 1040 (or 1040-A) with the notation "HSH". It's a little tricky entering in TurboTax. In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Click on Explore on My Own
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the start button
On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and enter the amount under Household Employee Wages

Three side notes:
1. A parent (as a Household Employee) is exempt from Social Security and Medicare taxes UNLESS they are watching the child and the parent is divorced (and not remarried) or widowed.
https://www.irs.gov/publications/p926/ar02.html#en_US_2014_publink100086740
2. You MIGHT not be required to report this as income at all, because it is only a transfer of money between family members, and could be considered a gift, under the right circumstances. But, in order for them to claim the day care credit, you must report it as income.

3. If the amount is less than $10,300 ($6200 if you are claimed as a dependent on someone else's return) and you are not filing a joint return with your spouse, you do not need to report the income at all, even if the parents are claiming the DCC. But because they are claiming the dependent care credit, they will have to provide your SS# to the IRS. There is a small chance that you will get a letter, from the IRS, that you will have to respond to. Hopefully, you can explain it away, with the facts.

B

bwa

Alumni - Champ

Are you under the age of 18?

K

kadoyle1936Author

Level 2

No. I am watching my grandaughter. I have no other income

K

kadoyle1936Author

Level 2

I watch her in their home

K

kadoyle1936Author

Level 2

Where do they get the W2. Can I file without it?

Hal_Al

Answer

Level 15

They do not need to give you a W-2, even for them to claim the dependent care credit (DCC). Since you sat the kids in their home that makes you a household employee and not a self employed person. But because you are the parent, of the taxpayer, you are exempt from the "nanny tax". That is they don't have to pay social security and medicare (FICA) tax and neither do you.

You will file the income as a Household employee. The money goes on line 7 of form 1040 (or 1040-A) with the notation "HSH". It's a little tricky entering in TurboTax. In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Click on Explore on My Own
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the start button
On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and enter the amount under Household Employee Wages

Three side notes:
1. A parent (as a Household Employee) is exempt from Social Security and Medicare taxes UNLESS they are watching the child and the parent is divorced (and not remarried) or widowed.
https://www.irs.gov/publications/p926/ar02.html#en_US_2014_publink100086740
2. You MIGHT not be required to report this as income at all, because it is only a transfer of money between family members, and could be considered a gift, under the right circumstances. But, in order for them to claim the day care credit, you must report it as income.

3. If the amount is less than $10,300 ($6200 if you are claimed as a dependent on someone else's return) and you are not filing a joint return with your spouse, you do not need to report the income at all, even if the parents are claiming the DCC. But because they are claiming the dependent care credit, they will have to provide your SS# to the IRS. There is a small chance that you will get a letter, from the IRS, that you will have to respond to. Hopefully, you can explain it away, with the facts.

Hal_Al

Level 15

Third side note added, above.

B

bwa

Alumni - Champ

If you are watching your granddaughter in your home (not hers) you would be considered self-employed, and report the income as business income subject to income and social security taxes. You would either need the Home and Business version of the program (if done on-line), or Deluxe or higher if you use a desktop program.

K

kadoyle1936Author

Level 2

I watch her in their home

B

bwa

Alumni - Champ

If you watch them in their home you would likely be their employee for that work. They should provide you with a W-2 at the end of the year that you would report as wages. They need to do that if they want to claim the child and dependent care credit.

T

Tosha Kay

Level 2

I get paid in cash for babysitting for my Aunt

ReginaM

Level 12

Babysitting income is usually self employment income. The income and expenses must be reported on Schedule C of IRS Form 1040. The IRS requires you to file if you had at least $400 in earnings from self-employment.

To enter your babysitting income into TurboTax follow these instructions:

Select Search in the top right hand side of your screen,
Enter Schedule C Income,
Select Go to Schedule C,
Answer the questions in the section
Continue through all the screens and you will be asked about your expenses that you can claim against your income.

If you're caring for a relative, and you don't have a profit motive; rather you're doing it to help the relative, you wouldn't be subject to self-employment tax. However, you would need to report the payments as taxable income on Form 1040, Line 21. While in TurboTax follow these steps:

Select Search in the top right hand side of your screen,
Enter 1099 Misc,
Select Go to 1099 Misc,
Answer the questions in the section
Continue through all the screens,
You will be asked Did this involve an intent to earn money?
Answer, No, it didn't involve an intent to earn money.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

S

Sherrywallen

Level 2

I baby sat for income and did odd jobs

Hal_Al

Level 15

@Sherrywallen -

The IRS considers undocumented cash income (no W-2 or 1099-MISC), for work performed, to be self employment income. Enter at "Business Income & Expenses" and TurboTax (TT) will complete Schedule C or C-EZ for you and allow you to deduct any expenses associated with this income. You'll also have to pay self employment tax (social security & medicare tax) on any profits greater than $400.

You report the income from your own records.