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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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  #1  
Old 02-13-2017, 08:58 PM
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Default Provider Filed Us As Her Employer.. Wants $$

Our child care provider is unlicensed and watches over 3 other children as well as our son.

She came to me wife today asking for 290 dollars for Social Security and Medicare tax we according to her were supposed to deduct from the check we give her as our part of the payroll tax. Her "tax guy" said we are her employer and should have been paying it. Ive NEVER heard of such a thing, we are paying for her services, she is not an employee.

She is the wife of one of my good friend, so we were totally took of guard and didn't know what to tell her. Does she have any legal grounds whatsoever??
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Old 02-13-2017, 09:11 PM
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If she's watching your child and others at her home, she is running a daycare business. You're not her employer. You would be the employer for a nanny, not a daycare provider.
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Old 02-14-2017, 06:34 AM
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Was she working out of her home? Then I would not think so.
If she was working out of your home? Then that would change things. But I'm sure others would know 100% (I'm from Canada so i dont want to say for sure).
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Old 02-14-2017, 10:11 AM
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Quote:
Originally Posted by Logb17 View Post
Our child care provider is unlicensed and watches over 3 other children as well as our son.

She came to me wife today asking for 290 dollars for Social Security and Medicare tax we according to her were supposed to deduct from the check we give her as our part of the payroll tax. Her "tax guy" said we are her employer and should have been paying it. Ive NEVER heard of such a thing, we are paying for her services, she is not an employee.

She is the wife of one of my good friend, so we were totally took of guard and didn't know what to tell her. Does she have any legal grounds whatsoever??
If the provider is caring for your children in your home, then you are her employer and should be withholding Social Security/Medicare taxes from her pay if you paid her more than $2,000 in a year. See IRS publication 926 Household Employer's Tax Guide.

If the provider is caring for your children in her home, she is self employed and is not your employee.
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Old 02-14-2017, 08:31 PM
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She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.
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Old 02-14-2017, 11:47 PM
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Quote:
Originally Posted by Logb17 View Post
She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.


Her tax guy should know she's running a business.
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Old 02-15-2017, 03:48 AM
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As a provider, we are responsible for these taxes. Not our parents. It's part of the costs associated w being self employed.
Quote:
Originally Posted by Logb17 View Post
She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.
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Old 02-15-2017, 04:14 AM
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Quote:
Originally Posted by Logb17 View Post
She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.
I'm guessing she didn't take the deductions she's entitled too either if the accountant screwed up already
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Old 02-15-2017, 09:12 AM
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That's something that a daycare should figure into their rates. I'd suggest to her that she speak with a different tax professional for planning her expenses and rates required to cover those expenses.
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Old 02-15-2017, 10:06 AM
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Quote:
Originally Posted by Logb17 View Post
She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.
I'm curious if she asked all the other parents to pay this or just you...
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  #11  
Old 02-15-2017, 10:59 AM
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Originally Posted by laundrymom View Post
As a provider, we are responsible for these taxes. Not our parents. It's part of the costs associated w being self employed.
Not in this situation. A provider who cares for a child in the home of the parent of the child is not self employed. She is the employee of the parent (nanny, or household employee).
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Old 02-15-2017, 11:52 AM
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Quote:
Originally Posted by TomCopeland View Post
Not in this situation. A provider who cares for a child in the home of the parent of the child is not self employed. She is the employee of the parent (nanny, or household employee).
I meant. As a childcare provider in my home I am self employed and responsible for these taxes.
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Old 02-15-2017, 11:58 AM
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Quote:
Originally Posted by TomCopeland View Post
Not in this situation. A provider who cares for a child in the home of the parent of the child is not self employed. She is the employee of the parent (nanny, or household employee).
He did say that she watches children in her home, not the parent's.

Quote:
Originally Posted by Logb17 View Post
She is watching our boy at her house, never at ours. She watches a few other kids as well.

She is claiming the IRS took the Social Security/Medicare tax we were supposed to pay out of her return.

I guess ill just have to tell her she did her taxes wrong, and we are not going to pay for her mistake.
She needs to amend her return immediately. How on earth could she claim you as her employer without a EIN/TIN and a W-2?

We ARE taxed on our income, we pay self employment tax.

Direct her to Tom's blog, or here. I would just tell her politely that she is running a daycare (hopefully not illegal) and is considered an independent contractor for tax purposes. Nannies are employees.
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  #14  
Old 02-15-2017, 02:50 PM
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Quote:
Originally Posted by daycarediva View Post
He did say that she watches children in her home, not the parent's.



She needs to amend her return immediately. How on earth could she claim you as her employer without a EIN/TIN and a W-2?

We ARE taxed on our income, we pay self employment tax.

Direct her to Tom's blog, or here. I would just tell her politely that she is running a daycare (hopefully not illegal) and is considered an independent contractor for tax purposes. Nannies are employees.
My previous posts may be confusing. In the situation where the parent brings her child to the home of the caregiver, the parent is not the employer of the caregiver and the caregiver is self employed. The caregiver must report all her income. The parent owes nothing regarding Social Security taxes to the caregiver.
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  #15  
Old 02-16-2017, 07:11 AM
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I would say,
I'm sorry provider but we are not your employer and not responsible for your taxes. I suggest finding an accountant who specializes in childcare provider returns so you aren't penalized or fined for filing and paying incorrectly. Possibly read up on Tom Copelands Blog/Books as he is an authority in the field.
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