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MommyLiberty5013
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If someone is a legal adult, and ordinarily pays income taxes, but will only earn around $450 per tax year for an extremely PT job, is that declarable income?

 

More detail, if a group of parents (not a business or non profit) get together and want to pay another adult to watch their kids for 2-3 hours once per week for several weeks every six months, and they pay cash, is the childcare worker obligated to declare that for taxation purposes? we have no means to do W2s and we're not a business or non profit in this group of parents.

 

My position is that the adult worker should declare, but it's not the role of the parent group to police them and verify they have done so. Yes? No?

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If someone is a legal adult, and ordinarily pays income taxes, but will only earn around $450 per tax year for an extremely PT job, is that declarable income?

 

More detail, if a group of parents (not a business or non profit) get together and want to pay another adult to watch their kids for 2-3 hours once per week for several weeks every six months, and they pay cash, is the childcare worker obligated to declare that for taxation purposes? we have no means to do W2s and we're not a business or non profit in this group of parents.

 

My position is that the adult worker should declare, but it's not the role of the parent group to police them and verify they have done so. Yes? No?

 

1.) All earned income is declarable.  The $600 rule that most people know about only applies to those making the payments.  If I pay a friend $200 to do work for my business (say paint a rental property), I do not have to turn in a 1099.  However, they should technically report the income themselves. 

If they are an actual employee earning that money, a W2 should be issued regardless of the amount.

 

2.) The person being paid has to declare the income. As the babysitter is working irregular hours, they would be considered an independent contractor and not an employee, so no W2 is needed.  As you are not paying the person as part of a business or trade, you do not need to file a 1099 either.

 

https://www.irs.gov/businesses/small-businesses-self-employed/reporting-payments-to-independent-contractors

https://www.inman.com/2013/01/25/when-and-when-not-file-form-1099-misc/

http://www.babysittersnow.com/hiring-babysitters/the-legal-side-of-hiring-a-babysitter-simple-guidelines-to-abide-by/

Edited by ChocolateReignRemix
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The person receiving the income should declare it on a Schedule C if she has other income to report. The people who pay her should get a signed receipt from her. Cash transactios are more suspicious.

 

Sent from my SM-G355M using Tapatalk

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I have occasionally made small amounts of money babysitting.  The amount goes on our (joint) taxes as other income.  No 1099, no W-2.  I don't know why the people paying me would have had any involvement in ensuring I claimed that income. 

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I have occasionally made small amounts of money babysitting.  The amount goes on our (joint) taxes as other income.  No 1099, no W-2.  I don't know why the people paying me would have had any involvement in ensuring I claimed that income. 

 

I think if the party who is paying the person providing the services, pays them more than USD $600 (?) in a calendar year, they need to report that to the I.R.S. on a form 1099, and provide a copy to the person who provided the services. It is the obligation of the party who received the money to report the money they made to the I.R.S.   If the person who received the money has above a certain amount of Net Earnings on the Schedule C form, they need to pay Self-Employment Tax on that.

 

Cash payments are suspicious to the I.R.S.

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Thank all. Very helpful.

 

One parent of the group wants to enforce, like police them, the child care workers declaring the income for taxation. I agree it's taxable and not advocating evasion. But as I stated, we are not a business or a nonprofit and it's a group of us parents. So there won't be a W2. Also we will be paying by check.

 

I'm going to say something like this to the childcare person/people in writing. "The monetary stipend you are receiving may be considered taxable income by some taxing authorities. Please consult your tax advisor or tax prep program for advice." This is as far as I feel the parent group can go in "policing." We have to trust them and their individual taxes are none of our business.

 

I'm the coordinator of the childcare for the group and this one woman is just....it's not that she's wrong. It's her failure to see she needs to mind her own nose.

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That is for employees. Babysitters are generally considered independent contractors, and in the situation the OP described the babysitter would be.

Right. We are not a business and these are not employees. We have not hired them and there is no contract. We actually call them volunteers. The monetary amount they receive is called a stipend - it is a bit extra. Like tipping the volunteers. Anyway, I agree it is taxable. But as a group of parents we just have no authority to tell the volunteers what to do. It's well beyond our reach.

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Thank all. Very helpful.

 

One parent of the group wants to enforce, like police them, the child care workers declaring the income for taxation. I agree it's taxable and not advocating evasion. But as I stated, we are not a business or a nonprofit and it's a group of us parents. So there won't be a W2. Also we will be paying by check.

 

I'm going to say something like this to the childcare person/people in writing. "The monetary stipend you are receiving may be considered taxable income by some taxing authorities. Please consult your tax advisor or tax prep program for advice." This is as far as I feel the parent group can go in "policing." We have to trust them and their individual taxes are none of our business.

 

I'm the coordinator of the childcare for the group and this one woman is just....it's not that she's wrong. It's her failure to see she needs to mind her own nose.

Is there one person writing the check for the entire group?  Will the check be written by the same person each time?

 

I wonder if you will be creating additional problems by putting something like this in writing.  Will you be opening yourself up to be seen as an employer?  Will there be liability issues if the chlidcare giver is hurt?  What if one parent is displeased with the services of the childcare provider?  

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Is there one person writing the check for the entire group?  Will the check be written by the same person each time?

 

I wonder if you will be creating additional problems by putting something like this in writing.  Will you be opening yourself up to be seen as an employer?  Will there be liability issues if the chlidcare giver is hurt?  What if one parent is displeased with the services of the childcare provider?  

Great questions.

 

I am the nursery coordinator. Parents pay me and I immediately pay our two childcare people with personal checks with all the money I receive from the parents. I do not keep any money for myself or for the group to be used at a later date. The childcare people are usually the same for an entire academic year (this is tied into our homeschool group). But they receive one payment in Sept-Dec, which is in one tax year. The second allotment comes in Jan-April, which would fall in a subsequent tax year. No single child care person will receive more than $450 per tax year.

 

We call them volunteers, not workers, or employees. The money we give them we call a stipend, not pay, income, or wage. The child care facet occurs as a subset in a larger group that does carry insurance since children are on the premises. We meet at a church and pay them rent for the use of space.

 

Parents have an opportunity at the conclusion of each academic year to provide feedback to the Nursery Coordinator. And, if something occurred anytime mid-year, the parent can certainly address any questions and/or concerns to me and/or our group's overall leader. We only staff nursery with two or more people. No one is ever a sole caregiver. We also have other policies and procedures in place.

 

We have a wide variety of families in our group, so I cannot produce any specific tax info for people as everyone's tax situation is different and doing anything of the sort would be ill advised anyway as I am not a professional.

 

I am trying to be patient with this parent who wants to be sure everybody pays their taxes, but aside from letting child care volunteers know that their stipends may be considered income by some taxing authorities, I do not think I can do anything else. it puts the responsibility firmly on their shoulders to report.

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Great questions.

 

I am the nursery coordinator. Parents pay me and I immediately pay our two childcare people with personal checks with all the money I receive from the parents. I do not keep any money for myself or for the group to be used at a later date. The childcare people are usually the same for an entire academic year (this is tied into our homeschool group). But they receive one payment in Sept-Dec, which is in one tax year. The second allotment comes in Jan-April, which would fall in a subsequent tax year. No single child care person will receive more than $450 per tax year.

 

We call them volunteers, not workers, or employees. The money we give them we call a stipend, not pay, income, or wage. The child care facet occurs as a subset in a larger group that does carry insurance since children are on the premises. We meet at a church and pay them rent for the use of space.

 

Parents have an opportunity at the conclusion of each academic year to provide feedback to the Nursery Coordinator. And, if something occurred anytime mid-year, the parent can certainly address any questions and/or concerns to me and/or our group's overall leader. We only staff nursery with two or more people. No one is ever a sole caregiver. We also have other policies and procedures in place.

 

We have a wide variety of families in our group, so I cannot produce any specific tax info for people as everyone's tax situation is different and doing anything of the sort would be ill advised anyway as I am not a professional.

 

I am trying to be patient with this parent who wants to be sure everybody pays their taxes, but aside from letting child care volunteers know that their stipends may be considered income by some taxing authorities, I do not think I can do anything else. it puts the responsibility firmly on their shoulders to report.

I would not want to be in your situation.  It does not matter if you call them "volunteers" and the payments "stipends."  If you are a "nursery coordinator" who is collecting money from people and then paying the childcare provider (and you would be the person a parent would talk to rather than the caregiver if any issue arises), I would be concerned about what position you are putting yourself in.  

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Great questions.

 

I am the nursery coordinator. Parents pay me and I immediately pay our two childcare people with personal checks with all the money I receive from the parents. I do not keep any money for myself or for the group to be used at a later date. The childcare people are usually the same for an entire academic year (this is tied into our homeschool group). But they receive one payment in Sept-Dec, which is in one tax year. The second allotment comes in Jan-April, which would fall in a subsequent tax year. No single child care person will receive more than $450 per tax year.

 

We call them volunteers, not workers, or employees. The money we give them we call a stipend, not pay, income, or wage. The child care facet occurs as a subset in a larger group that does carry insurance since children are on the premises. We meet at a church and pay them rent for the use of space.

 

 

 

What you call it and what the IRS would consider it might not be the same thing. And if one of them gets hurt while working, you might find yourselves in a mess if the caregiver claims her medical expenses to her insurance company and they ask "where" it happened. They might come after your organization. Make sure your group is adequately insured. Check with an accountant on the financial part.

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Great questions.

 

I am the nursery coordinator. Parents pay me and I immediately pay our two childcare people with personal checks with all the money I receive from the parents. I do not keep any money for myself or for the group to be used at a later date. The childcare people are usually the same for an entire academic year (this is tied into our homeschool group). But they receive one payment in Sept-Dec, which is in one tax year. The second allotment comes in Jan-April, which would fall in a subsequent tax year. No single child care person will receive more than $450 per tax year.

 

We call them volunteers, not workers, or employees. The money we give them we call a stipend, not pay, income, or wage. The child care facet occurs as a subset in a larger group that does carry insurance since children are on the premises. We meet at a church and pay them rent for the use of space.

 

Parents have an opportunity at the conclusion of each academic year to provide feedback to the Nursery Coordinator. And, if something occurred anytime mid-year, the parent can certainly address any questions and/or concerns to me and/or our group's overall leader. We only staff nursery with two or more people. No one is ever a sole caregiver. We also have other policies and procedures in place.

 

We have a wide variety of families in our group, so I cannot produce any specific tax info for people as everyone's tax situation is different and doing anything of the sort would be ill advised anyway as I am not a professional.

 

I am trying to be patient with this parent who wants to be sure everybody pays their taxes, but aside from letting child care volunteers know that their stipends may be considered income by some taxing authorities, I do not think I can do anything else. it puts the responsibility firmly on their shoulders to report.

 

Yeah, see that is a lot different than what was in your OP.

 

You can call people what you want but that doesn't change their legal status.  The definition between employee and independent contractor is a fine line.  I would consult an accountant, and when doing so I would drop the semantics and just explain exactly how they work.

 

If they are independent contractors, you are okay if they are making under $600.  If they are employees you have to do a W2 regardless.

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Yeah, see that is a lot different than what was in your OP.

 

You can call people what you want but that doesn't change their legal status.  The definition between employee and independent contractor is a fine line.  I would consult an accountant, and when doing so I would drop the semantics and just explain exactly how they work.

 

If they are independent contractors, you are okay if they are making under $600.  If they are employees you have to do a W2 regardless.

I thought you only had to file a W2 for a babysitter/nanny if you paid them over $2000 (although the money is still taxable income to the sitter).  

 

My concern in this situation is that it is much different than if I hire a sitter to come into my home and take care of my children.  If I collect money from a group of people and then turn around and pay a sitter to watch a group of children, have I entered into a very different legal situation (where not only would the sitter possibly have legal claims if there were injury but where the other parents could bring a claim against me if anything happened to their child.)?

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I thought you only had to file a W2 for a babysitter/nanny if you paid them over $2000 (although the money is still taxable income to the sitter).  

 

My concern in this situation is that it is much different than if I hire a sitter to come into my home and take care of my children.  If I collect money from a group of people and then turn around and pay a sitter to watch a group of children, have I entered into a very different legal situation (where not only would the sitter possibly have legal claims if there were injury but where the other parents could bring a claim against me if anything happened to their child.)?

 

There is something different for household employees versus other employees.  The babysitter in this case would not be a household employee.

 

The legal issue is separate from the pay issue.  If the sitter was a pure volunteer there is still a liability issue if they are injured while caring for the children.

If the person is acting on behalf of the group at their request, and all agree on the sitters hired, the legal issues are not really that much of an issue.  You can always be sued for anything but parents working together all take an equal share of the burden.

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