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Daycare and Taxes>Tax Expenses
gbcc 12:14 PM 01-21-2010
My enrollments have increased lately so I have less time during the day to get things done. I feel bad when I spend my family time cleaning and picking up after others children. So, I decided to hire a cleaning lady so I don't take time away from my own son. Question is, I am doing this due to daycare so where would this go? Would it be cleaning supplies or wages to employees? Thanks!
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kitkat 01:18 PM 01-21-2010
According to the Family Child Care Tax Workbook & Organizer, the cleaning lady would be considered an independent contractor. If you pay her $600 or more during the year, you have to fill out Form 1099 Misc. Income, give a copy to the cleaning lady, and file the form with the IRS. If you pay her less than $600, you don't have to do a 1099. It is the cleaning lady's responsibility to claim the income on her taxes. You would report payments on Schedule C, line 11. Don't enter anything on Sched. C, line 26, wages (that's for if you have an employee).

The book does not say whether or not you need to use your time space ratio. If she is cleaning areas that are not used for child care, then you really can't count the entire expense.

I would contact a tax preparer and ask them, just to be sure. You could also submit the question to Tom Copeland at: http://www.resourcesforchildcaring.o...m?page=Ask+Tom

I submitted a tax question recently and he quickly replied back.
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gbcc 02:40 PM 01-21-2010
Thank you! I appreciate you taking the time to look that up!
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Chickenhauler 04:50 AM 01-24-2010
Before you can call her a 'independant contractor", she has to meet a few guidelines.....

http://www.irs.gov/businesses/small/...=99921,00.html

I think one of the biggest determinations would be who supplies the cleaning supplies.....if you are, then she would probably be an employee, if she does, then she's probably an independent contractor.

The whole contractor/employee thing is something the IRS is taking a long, hard look at right now, and there is some debate going on in Congress about it also..... http://www.worldofworklawblog.com/20...t-contractors/
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Tags:irs, taxes, wages
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