What is the difference between employed and self employed as a babysitter?

[whitneysanders95]

I was hired by a family i know. They have me working a regular schedule. I got paid over 3,000 last year. Not contracted tho. I work from my house and their house. They provide the food for their kids I just watch and entertain them. The parents pick the schedule and this is my only job, my only source of income. Am I an employee or self employed?

[ToddL99]

In your case, the difference between "employed" and "self-employed" as a babysitter is one of who takes responsibility for your tax payments (withholding) reporting.

"Employed" means you are an employee of someone else . That  employer pays you, withholds tax (income, Social Security and Medicare), pays a portion (1/2) of your Social Security and Medicare tax for you, pays unemployment insurance premiums for you, probably workman's compensation insurance, and probably some other taxes as well.

"Self-employed" means you work for yourself, and take personal responsibility for all your tax obligations. The people who work for you only give you cash or a check for your work. You have to plan for, budget and pay all your tax obligations. If you aren't able to work or can't find work, your income stops.

The Differences Between Employed vs. Self-Employed

[whitneysanders95]

Ohkay. So then it really depends if they feel like taking care of taxes or not then? Its up to them? They didnt take out taxes or so anything this year but I was hoping they could for this upcoming year. So if they take care of the taxes and stuff, i can be considered an employee? And isn't that better for me come tax season? I did my taxes and they said because they didnt take taxes out of my pay ut really screwed me up and i could have gotten back more. So this year, since i make over the paid amount mark, They would have to count me as an employee, right? Or just if they feel like it?

[LenaH · Accepted solution]

No. The IRS has strict guidelines on whether you should have received a 1099-NEC (self-employed). or a W-2 (employee). Usually, babysitters are household employees. 

Here are some questions to consider in making the determination: 

• Do the parents of the children you babysit set the schedule? 
• Are you paid on a regular basis?
• Is your schedule set by the parents?

If the above answers are yes and the parents basically control what is done and how it is done, then you are an employee. 

The IRS gives a great example of this in Publication 926. Example: You pay Betty Shore to babysit your child and do light housework 4 days a week in your home. Betty follows your specific instructions about household and child care duties. You provide the household equipment and supplies that Betty needs to do her work. Betty is your household employee.

The parents should have issued you a W-2 and need to in the future if you continue to be their employee.

Please see IRS Publication 926 for additional information. 

@whitneysanders95