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Old 01-10-2019, 02:44 PM
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TomCopeland TomCopeland is offline
Business Author/Trainer
Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 3,060
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Originally Posted by loischerry View Post
hello all! i realize im new and realize this is my 1st post. i found this site by googling tom copeland. whose name i was given to look up my tax question. ive read some but most is about in home providers as a business.

background info. i am in mi, i am unlicensed. i am a seasoned daycare worker i will be 47 at the end of the month and have been working in daycare settings since i was 21. 5 years ago the center i was working in folded and closed. i am trained, with ceu's, sids, and cpr and hold a cda. 6 months after "retiring" ( 4 yrs ago) i started caring for my nephews and niece and my cousins baby. its a paycut i wouldnt trade for anything in this world. i love it. this past sept (2018) i started helping a neighbor out and watching her school aged son for 45 mins in the morning before the bus came. she pays me $10 for that 45 mins ($50 a week). she asked me this week about child care credit on her taxes and if she could have my info. i said id never provided it before and id look up info regarding it. and get back to her next week. i use one of those big guy corporations for my taxes and the past 4 yrs have claimed my income from my family as other earned income ( idk what form that is in irs talk) my family has never asked for tax info and ive never given it. ive not actually considered myself a business nor have kept any records business-wise at all. i take this as a neighbor helping a neighbor but i dont want to be taken either. im really at a loss here as i dont provide anything for this boy other than a warm place to watch spongebob and tell him when its time to walk across the yard to his driveway for the bus, i guess my questions are
1. how do i go about this? add up what shes paid? ask her for the amount shes paid?
2. what info do i give my neighbor? is there a form? do i need to legalize this info ( certified mail or notarized? )
3. how would i then claim this info on my taxes? again im unlicensed so i have no provider # how would the irs know that the info she puts on her taxes about child care is correct and how would they know what i put on mine about the claim would be correct?

TIA for any answers.
You need to contact the Michigan child care licensing office to find out whether you are operating legally or not under your state rules. You don't have to give your real name when you call.
Whether you are legal or not, you are running a business and must report your income on Schedule C and pay Social Security/Medicare taxes and federal and state income taxes.
If you are illegal you can claim all expenses except for those associated with your home: rent, utilities, property tax, mortgage interest, house insurance, house repairs and house depreciation.
The parent can still claim their child care tax credit even if you are illegal. Give her a receipt and your Social Security number. You can get an EIN number to avoid giving out your Social Security number.
Don't worry about what the parent is putting on her tax return, you will never know. Instead report your income on your Schedule C and claim those expenses you are entitled to.
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