How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Anne Your Own Question
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2355
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
5242771
Type Your Tax Question Here...
Anne is online now
A new question is answered every 9 seconds

If a person is paid by the state as sitter on a 1099 is that

Customer Question

If a person is paid by the state as sitter on a 1099 is that person liable for gross receipt tax. They file a schedule c in order to pay self employment tax but are not really self employed
JA: Thanks. Can you give me any more details about your issue?
Customer: Person gets about 7000 a year from nm to care for kids. As I said state sends her a 1099 with no taxes withheld is she liable for gross receipt tax
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 8 months ago.
Category: Tax
Expert:  Anne replied 8 months ago.

Hi

I'm Anne. I've been preparing taxes for 27 years and I'll be happy to help you.

If this person watched the children in her home, then according to the state, she is Self Employed. This is especially true if she watches children from more than 1 family.

She may, however, deduct her expenses that she incurred while watching the children. This would include food, paper products, games/books, outings, "equipment" such as high chairs, baby swing, play pen, etc.

If she's licensed through the state, then she can write off a % of her utilities, repairs on her home, improvements such as fencing, etc and she can depreciate a % of her cost basis of her home.

The only other option that would make her an employee as opposed to self employed is if she watched the children in THEIR home. If this is the case, then the people who hired her to be their private "nanny" (as it's called) need to issue her a W2.

If you have further questions, please post them here & I'll be notified.

If this answer has helped you, please take the moment to rate positive by clicking on the stars.

It is ONLY through positive feedback that we are compensated for our time and knowledge

Thank you for choosing justanswer.

Customer: replied 8 months ago.
The answer was of no help. That is basic schedule c. I needed to know about gross receipts
Expert:  Anne replied 8 months ago.

Gross receipts are the total income she receives from the state plus any $ amount that parents who pay her directly.

Gross receipts are before expenses. There is not a "gross receipts" tax. She will however, have to pay her own Social Security tax (Form SE) on her NET income, which is gross income less her expenses.

I hope this helps,

Customer: replied 8 months ago.
In nm gross receipt tax is money you charge customer usually 7% on the dollar for resale goods , but I don't know if it is for services like babysitting since she doesn't get pd by the people but the state
Expert:  Anne replied 8 months ago.

No, her business doesn't work like you describe. She's selling a service, which doesn't require any tax on the GROSS.

All of her taxes are calculated on her NET income, after all of her deductions. Since she is self employed, she will need to pay 15% (again on her net income) into her Social Security tax, (Form SE) .

I hope this helps

Expert:  Anne replied 8 months ago.

I was just checking back with you to see if you had any further questions or needed any additional information.

If not, then please take the moment to rate positive by clicking on the stars so that I may be credited with helping you.

Thank you again for choosing justanswer.

Related Tax Questions