Can i claim babysitting on my taxes

You'd still have to file Schedule C, but it would show a business loss. If your Schedule C shows that you made a profit from babysitting, you're required to pay self-employment tax on this income. If you worked for an employer, your employer would withhold FICA taxes from your paychecks and match those deductions on your behalf. If you're self-employed, you're both employee and employer, so you must pay both portions of the FICA tax yourself.

This amounts to You might think you're better off foregoing the money you make babysitting. However, there may be a small silver lining if you go through all this trouble to claim what you earn as income.

When you claim income and file taxes, you may become eligible for certain refundable tax credits. Otherwise, the credit comes off your tax bill to the IRS. The earned income credit might bring your child a refund if she had to file a return to report babysitting money and her income was negligible, and you may qualify for some education-related refundable credits if you're paying to put your child or another dependent through school.

Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.

I'm thinking of paying a family member to babysit for my two-year old child while I work. May I claim this cost as a childcare expense even though my family member isn't a registered daycare provider?

Who's responsible for paying employment taxes on the money I pay for this care? See Publication A, Employer's Supplemental Tax Guide for a general discussion of how to determine whether an individual who is performing services for you is an employee or an independent contractor. Special rules apply to family employees generally, and to family employees who perform household work including babysitting in your home.

However, there are times when I do need some assistance and I have to hire a babysitter. The good news is that there are some sweet and hardworking teens in the area. Having someone watch over our toddler and our little girl makes it much easier to knock out the bigger, more intensive projects. Another question that comes up with earning money from side jobs, especially with teenagers and their parents , is whether or not to file taxes on that income.

There are some factors you need to consider which can help you find the right solution for your situation. The IRS has laid out thresholds for those required to file.

While you may not be thrilled with filing taxes, there can be some benefits for you.