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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 03-12-2012, 11:03 AM
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annafaye1985 annafaye1985 is offline
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I have read that no matter what when having a person work in your family childcare you have to pay taxes & workmans compensation. BUT.....

If the person is coming in as a second provider and doing her thing while I do my thing does that still count? We would work together and talk about things we would want to do for the day & then go from there. I feel like this should be a indep. contractor..
What do you think?
I would be paying her & myself out of the childcare small business account I will be starting when I open.

Please let me know your thoughts. Don't know if it matters but this is MInnesota...
Thanks,
Anna Faye
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Old 03-12-2012, 12:09 PM
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Check out Tom Copeland's blog about this and hopefully you can find your answers there. He is from MN too.

http://www.tomcopelandblog.com/2011/...ntractors.html
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Old 03-13-2012, 11:12 AM
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The issue of when a person is an independent contractor or an employee is not a simple one. The IRS would look at a number of factors. The most important one is, "who has the right to direct and control the person's work?" If the person is coming into your home, using your equipment and helping you care for children, then it looks like an employee. If the person is offering a separate activity (puppet show, music lesson, etc.) then the person looks like an independent contractor.

In your case the person sounds like an employee. It's your business and she is helping you. You don't allow her to do whatever she wants. She is following your rules. Maybe there are other factors that you haven't explained that might change my answer.
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Old 03-13-2012, 03:23 PM
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Michael Michael is offline
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Quote:
Originally Posted by TomCopeland View Post
The issue of when a person is an independent contractor or an employee is not a simple one. The IRS would look at a number of factors. The most important one is, "who has the right to direct and control the person's work?" If the person is coming into your home, using your equipment and helping you care for children, then it looks like an employee. If the person is offering a separate activity (puppet show, music lesson, etc.) then the person looks like an independent contractor.

In your case the person sounds like an employee. It's your business and she is helping you. You don't allow her to do whatever she wants. She is following your rules. Maybe there are other factors that you haven't explained that might change my answer.
I had to deal with this in California with a business I had. Wasn't very black and white.
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