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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 03-29-2018, 07:55 AM
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Default Another Teen and Taxes Question!

If my teen daughter was to care for a few children in our home during the summer months she would be considered an independent contractor/business owner, correct? I understand she would have to pay self-employment taxes.

My question is - what deductions could she take to offset those self-employment taxes? She does not own the home, I do, so I figure she can't really deduct anything other than maybe supplies and food if she pays for those herself.
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Old 03-30-2018, 09:04 AM
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Default teen daughter working in home

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If my teen daughter was to care for a few children in our home during the summer months she would be considered an independent contractor/business owner, correct? I understand she would have to pay self-employment taxes.

My question is - what deductions could she take to offset those self-employment taxes? She does not own the home, I do, so I figure she can't really deduct anything other than maybe supplies and food if she pays for those herself.
First, you need to check to see if she is in compliance with child care licensing rules. In some states, children of providers must meet all licensing rules to care for children. Assuming she can legally do this, then she should report her income on Schedule C as a sole proprietor. She can only claim expenses she directly pays for: food, supplies, etc. as well as car mileage if she drives for business purposes.
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