Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

I am self employed and provide child care from my home. I made

4800.00 in 2009. I have...
I am self employed and provide child care from my home. I made 4800.00 in 2009. I have one minor child living at home. I am single and file head of household. My question is after the goverment takes out their share, will I still qualify for the child tax credit and recieve some kind of return?
Show More
Show Less
Ask Your Own Tax Question
Answered in 8 minutes by:
12/29/2009
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Verified
HiCustomerbr />
Can you please tell me if the $4800 you mentioned was your gross income for the whole year AFTER deducting your allowable expenses?
Ask Your Own Tax Question
Customer reply replied 7 years ago

Hi anne,

 

$4800 is gross for the whole year without deducting anything. This is my first time filing self employed so I know nothing about allowable expences.

Ok just a couple of more questions, and then I'll be able to answer your question.

Do you have any other sources of income, whehter taxable or not, such as wages from a job you held part of the year, child suport, etc.

How much is your housing payment/month (whether rent, or if you're paying on a mortgage)

Ask Your Own Tax Question
Customer reply replied 7 years ago
My daughter receives SS payments with myself as beneficiary from the death of her father. We receive $748.00 a month. So in total we recieved $8976.00. That's the only other form of income we received. I did not work anywhere else. I pay $890.00 a month in rent.
Thank you Customerfor that additional information.

First let me express my sympathy on your loss. Losing a loved one is never easy. I know.

I'm assumng that the parent died more than 2 years ago, so filing using the married filing joint status, or the qualifying widow status is no longer an option. (Based on your statement that you normally file as head of household) If this is not correct, please let me know.

I asked those follow up questions because there are some real issues with the IRS and self employment income, head of household filing status, and the Earned Income Tax Credit (which you will qualify for) Let me tell you what those issues are, and what I would do/ask if you were sitting at my desk wanting to have your taxes prepared.

You stated you were self employed as a day care provider, and that this was your first year, so you weren't aware of what types of expenses would be allowable. There is a wide variety of allowable expenses for day care providers, but probably the biggest one I see on a regular basis is for food for the child.

Although I seriously doubt this is true in your case, IRS takes an extremely dim view of folks who file as self employed with no expenses, mainly because of the Earned Income Tax Credit, which you should qualify for this year. (Based on your low income and the fact that you have a child that lived with you the whole year) So,before you actually sit down on your own or with a tax advisor to prepare your taxes, you need to see what receipts you can find for things like extra food purchased for the child, equipment, such as a baby swing, special toys that you would not have purchased for your own child, etc.

Your biggest issue however is that you pay more in rent than what income you state you have. Your rent at $890/month x 12 months is $10680. You stated your total income from all sources was $8976. This is an important fact to bring up since IRS may deny any refund based on the fact that you paid out more than what you brought in, so you will want to address this issue when you file your taxes. (Its possible for this scenario of paying out more than what you brought in if you were living off your savings in the bank, life insurance proceeds, or a prior large tax refund, for example) This is also important when determining your filing status for the year and whether or not you may claim your child as a dependent. I will address those issues separately.

One of the rules for claiming your child as a dependent on your tax return and being able to use the "head of household" filing status is that you paid more than half the cost of maintaining the home for yourself and a dependent child.

In order to be your dependent, one of the qualifications is that the child not provide more than half of their own support. If Social Security benefits that are paid to a child that is used for that child's support (if the benefits are used to help pay the rent, food, clothing for the child, etc) then that counts as support provided by the child (I know...not fair since these are survivor benefits, but that is what the IRS regs state)

Social security benefits.

This means that this year, you may find that you can not claim your child as a dependent and get the child tax credit. Since you income is so low, using the single filing status instead of the head of household filing status will not create an additional tax burden for you. You may still claim the earned income tax credit since the child lived with you. However, if the child provides more than half of their own support, and you are unable to claim them as a dependent, then you will be unable to claim the child tax credit for that child for that year. See below:

Child Tax Credit


Not filing a tax return is not an option for you, since the filing requirement for self employe individuals is $400 of gross self employment income and you have exceeded that $ amount.

As for your original questions, will you qualify for any type of return, the answer is yes, IF you can adress the issues I mentioned at that time you file your tax return.
You will be eligible for the Earned income credit based on your net self employment earnings. Please see below:

Earned Income Tax Credit (EITC) Overview

As a self employed person, you will also be responsible for paying your own social security tax. You do this by filing 2009 Form 1040 (Schedule SE) Self-Employment Tax on your NET earnings from your self employment income.

I know this is a long answer and is alot to take in, but there was alot more to your situation than just meets the eye. Just giving you a simple yes or no answer, with all of these variables, would not have helped you in the long run, since it could have left you wide open to be blind sided later on either at the tax preparer's desk, or in the form of an audit letter from the IRS.

Please feel free to come back with any follow up questions you may have.



Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Verified
Anne and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 7 years ago
Thank you Anne!
Ask Anne Your Own Question
Anne
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
2,439 Satisfied Customers
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses

Anne is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I am preparing a form 8802 for an LLC that will be filing as
Good morning. I am preparing a form 8802 for an LLC that will be filing as a Partnership on Form 1065. For 2016 this entity was a Single Member LLC and two Partners were admitted October 1, 2017. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
Am I on the right path to decreasing my tax burden on the
Am I on the right path to decreasing my tax burden on the income made in commission for unpaid quarterly taxes?The break down is the following for me and frank :so far Eric nurse w-2 full-time earning… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Filed W1040 for self-employment. Should I file amended return for HSH?
I was self-employed last year and I filed a W1040 tax form. Everything went through well. I did it through an H&R computer program. Currently I am in need of financial aid as I am going to college. I … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Lev, I am preparing federal unfiled tax returns for a client
Good morning Lev, I am preparing federal unfiled tax returns for a client of mine. I am also ready to finalize the 2014 tax return and there is an NOL created on his return. The client has already fil… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
1099-R with distribution code 3. Can I get an earned income credit?
If someone receives a 1099-R with a distribution code 3, can they qualify for earned income credit? The person receives his pension because he became disabled.… read more
Bizhelp
Bizhelp
Certified Public Accountant (CPA)
Bachelor's Degree
638 satisfied customers
Is a tax return less likely to be audited if it's prepared
Is a tax return less likely to be audited if it's prepared by a CPA or simply a tax person? Secondly, our Rotary Club is a 401 C for we have a 401 c 3 Foundation the question is can individual members… read more
socrateaser
socrateaser
1,031 satisfied customers
What are the benefits of getting an accountant vs. preparing
What are the benefits of getting an accountant vs. preparing your taxes through TurboTax? In the past year we got married and bought a house.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Income from the leasing of cars...is it self employment
Income from the leasing of cars...is it self employment income? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I need help with preparing a tax return and I may need to
Hi I need help with preparing a tax return and I may need to file form 3520 as well. Please let me know if you can assist.… read more
taxmanrog
taxmanrog
Master\u0027s Degree
700 satisfied customers
Can i file head of household on my 2016 tax return if my
Can i file head of household on my 2016 tax return if my husband and I were going through a divorce proceeding but he passed away before the divorce was finalized in mid 2016?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
I filed my Form 1040, prepared on TurboTax and filed
I filed my Form 1040, prepared on TurboTax and filed electronically via TurboTax. I got nothing back and was told by the IRS that the refund was sent to a different bank transit number than the one sh… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,490 satisfied customers
I qualify for renters credit and am head of household now
ok I qualify for renters credit and am head of household now how and where do I fill out necessary paperwork for 120.00 a year and do I ,or can I receive the credit for the past 2 years? thank you for… read more
abci168
abci168
Principal
27 satisfied customers
My tax preparer is with Liberty Tax, and filed incorrect
Hi. My tax preparer is with Liberty Tax, and filed incorrect returns without my knowledge or significantly … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
736 satisfied customers
I am preparing a corporate tax return. The company is a
I am preparing a corporate tax return. The company is a payroll company based in NJ but almost all of the clients are in NYC. Is the income generated from NY clients require a NY S corporate tax retur… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
A Form 1065 partnership return is being prepared for a
A Form 1065 partnership return is being prepared for a partnership whose General Partner is a single member LLC. In the Analysis of Net Income (Loss) section at the top of page 5, is the LLC's portion… read more
taxmanrog
taxmanrog
Master\u0027s Degree
700 satisfied customers
Second opinion] I used an on line tax preparer, and they
Second opinion] I used an on line tax preparer, and they sent me my tax return. The tax return had an error now the IRS wants me to pay for that error when it's the pa … read more
taxmanrog
taxmanrog
Master\u0027s Degree
700 satisfied customers
I have filed head of household due to being the only income
I have filed head of household due to being the only income and taking care of 5 kids yet I am married yet not together under the same roof do I need to amend my taxes I think I may have gotten wrong … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I am preparing a partnership tax return for 2016. The
I am preparing a partnership tax return for 2016. The partnership holds commercial rental property. one of the partners, 50%owner, passed away in April 2016 and left his interest to his spouse. i woul… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x