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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 06-08-2017, 01:04 PM
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Default New To Babysitting Tax Question

I have a few questions. To start, we might start watching 3 kids from a single family (all siblings). We also have 3 children of our own (all in full time school). It will be 2-3 days a week and we will get paid for the service.

So, the first question is, do we need to claim this income when doing our taxes? I assume so.

The second question is, if we do claim the income, will it be required that we are licensed? I have read a lot about not needing a license if you watch 3 or less kids from a single family, but it wasn't clear if your own children count towards that 3.

I think I have read that you need to be licensed to write off expenses, but I am not as concerned about that. I am more concerned with any legal matters. I don't want to do anything that could get us in trouble.

Thanks in advance.
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Old 06-08-2017, 01:06 PM
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This was my post. I didn't realize I wasn't logged in and it let me post as a guest.
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Old 06-08-2017, 01:35 PM
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Blackcat31 Blackcat31 is offline
 
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Originally Posted by Unregistered View Post
I have a few questions. To start, we might start watching 3 kids from a single family (all siblings). We also have 3 children of our own (all in full time school). It will be 2-3 days a week and we will get paid for the service.

So, the first question is, do we need to claim this income when doing our taxes? I assume so.

The second question is, if we do claim the income, will it be required that we are licensed? I have read a lot about not needing a license if you watch 3 or less kids from a single family, but it wasn't clear if your own children count towards that 3.

I think I have read that you need to be licensed to write off expenses, but I am not as concerned about that. I am more concerned with any legal matters. I don't want to do anything that could get us in trouble.

Thanks in advance.
Yes, you need to claim ALL income.
Whether licensed or not.

Providing care for only one family (regardless of the number of children in that one family) does not require a license in my state (MN) but you will need to check your state requirements to be sure if you do or don't need a license. Each state is different in counting the provider's own children and up to what age so that is also dependent on your state.

As far as taxes go, even if you are illegally providing care (which I am not advocating for) you should still always claim your income and pay taxes accordingly.

Here is the link to each state's licensing threshold:

http://www.daycare.com/states.html
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Old 06-08-2017, 02:26 PM
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TomCopeland TomCopeland is offline
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Originally Posted by Unregistered View Post
I have a few questions. To start, we might start watching 3 kids from a single family (all siblings). We also have 3 children of our own (all in full time school). It will be 2-3 days a week and we will get paid for the service.

So, the first question is, do we need to claim this income when doing our taxes? I assume so.

The second question is, if we do claim the income, will it be required that we are licensed? I have read a lot about not needing a license if you watch 3 or less kids from a single family, but it wasn't clear if your own children count towards that 3.

I think I have read that you need to be licensed to write off expenses, but I am not as concerned about that. I am more concerned with any legal matters. I don't want to do anything that could get us in trouble.

Thanks in advance.
What BlackCat says is true. In addition, if you are operating illegally you can't claim house related expenses, but you can deduct other expenses. If you are licensed or exempt from licensing (according to your state rules) you can claim all allowable deductions. Beware of trying to operate illegally. You won't be able to get business liability insurance and you will be at greater risk if a child is injured. Your homeowners insurance may not cover you as well.
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