Baby Sitting money and Taxes - Page 2

aliadam · 02-05-2008, 12:23 PM

Quote:

Originally Posted by momof2boys in il

If it were me, tell her that she can clain it as you are, and cut your losses. BUT, tell her that you are going to have to be required to raise your prices since she is claiming it and you are having to pay taxes now. She may agree this year to NOT claim it in order to not have to pay a higher price.

Well this is what I was going to recommend also, but it sounds like it's a moot point now. It's a shame that the two of you couldn't work it out as that small amount of money on either side isn't worth a family disagreement, but you were giving her such a good deal anyway, I can't imagine she was trying to stiff you.

runkch · **My daycare provider isn't reporting-what to do??**

I pay my daycare provider $150/week for services...and have been doing so since August. She has a few other kids, so I KNOW she made more than $500 last year! She told me she wasn't reporting since she would have to raise her prices. Her prices are very comparable for the area ($50/day for 2 kids). I know it would make a HUGE difference for us to take the daycare deduction. What can I do if she is refusing to report? We really like her...

Cookie2 · 02-05-2008, 12:26 PM

This is one of those issues that MUST be discussed prior to doing business with each other. Tax time is the wrong time to be bringing up the subject.

runkch · **Assuming people report...bad idea**

Quote:

Originally Posted by Cookie2

This is one of those issues that MUST be discussed prior to doing business with each other. Tax time is the wrong time to be bringing up the subject.

I had never used an in-home provider, and really...I ASSUMED she would report. How prevalent is it that in-home providers DON'T report? I know she doesn't make a huge amount of money, but just from August to December, she made $2850 from me alone....and has 3 other kids.

Should I drop the subject with her and shop around for another provider?

Cookie2 · 02-05-2008, 01:42 PM

Personally, I'd hand her a 1099 to report how much I paid her then claim the credit on my taxes.

MegNAbbysMom · 02-05-2008, 02:06 PM

Yikes! Sounds like sister-in-law is calling the kettle black by calling you selfish.

Check with an accountant but I think if you had as much expenses as income then it would cancel out and you don't have to claim anything - just have it in writing in case you ever get audited. For example, if you feed the child - what is the expense for that? If you drive the child somewhere - what is the expense (miles x .485). I know a girl who used to clean an office and the last year she was there she got a 1099 for $604 but she had enough expenses from mileage driving to and from the place and driving to store for supplies that she didn't have to claim anything. If I were you I'd start adding it all up and see what you come up with.

Good luck!

DebbieL · 02-05-2008, 03:11 PM

Personally, I think you are giving her WAY too much of a break on the price. You should IMMEDIATELY raise it (and not just a little - I'd say it should be double what she's paying at least). If she stops using you, so what? I'm sure if you really need babysitting money you could easily find another kid to watch (and whose parent won't feel entitled to a ridiculously low rate). Good luck to you!

runkch · **Thanks!**

Quote:

Originally Posted by Cookie2

Personally, I'd hand her a 1099 to report how much I paid her then claim the credit on my taxes.

Thanks...I will look into this...I guess if she really gets upset, I can always find another provider. Heck, with all the $ I am saving on the Joneses project (we are doing really great!!) then perhaps I CAN afford our previous day care center that my little girls really loved! The oldest will be in K next year anyway... You're right, I really should have asked her about taxes before we started with her...hind site...so eye-opening!

kmGA · 02-06-2008, 12:46 PM

You are totally in the right about this one. IMO she should absolutely not claim you b/c you are giving her such a deal. Sounds to me like she doesn't know how good she has it. Not only was it cheap day care, but it is family! Sorry it has become such a sticky situation.

happymommmy · 02-06-2008, 03:44 PM

If someone did me the FAVOR of watching my kid(s) for such a low price, I would NEVER even think about reporting it, especially if it is a family member that will be taking care of them. Having someone i really trust would be much more important to me than being able to claim UNDER $400 in daycare!!!!!!!

It's too bad that it ended the way it did, but we learn from our mistakes. So next time you do business with someone, make sure you agree before hand on everything. At this point, i don't think i would take care of them anymore. It's just recipe for trouble, and even if she agrees that she will not report it this year ... YOU NEVER KNOW, bec. she still could do so!