Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I live in California. My cousin baby sits my daugther

Customer Question
for me a two days...
I live in California. My cousin baby sits my daugther for me a two days a week while both my husband and I are at work. We plan to give her $5000 a year. She will be watching my child at her home. Is she classified as a independent contractor and so I
issue her a 1099 MISC form at the end of the year? I'm unsure what to do, its not that much money but I wanted to be sure we both weren't penalized on our taxes. Thanks!
Submitted: 3 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 24 minutes by:
7/1/2015
Tax Professional: Phillip B, EA, Enrolled Agent replied 3 years ago
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.
Verified
Thanks for using JustAnswer.com! I will do my best to provide you with a clear and concise answer to your tax question based on the information that you have provided.
In this situation, you will have your cousin give you a signed form W-10 Dependent Care Identification and Certification. When you file your tax return, you will report what you paid her on your child care credit form 2441. You may want to provide her with a 1099-MISC to help her know what you paid her for the year, but you would not be required to send a 1099-MISC to the iRS or your cousin. She will be able to deduct any babysitting expenses that she may incur if there are any (she could take a special home office expense for day care providers that allows her to deduct a larger than normal portion of her home expenses). Unfortunately, she would pay self-employment tax of 15.3% on any net (the 5,000 dollars gross that you pay her minus any expenses she finds that she can deduct).
The other option is giving her a W-2. You would still claim the child care credit on form 2441, but you would also withhold social security and medicare tax from her gross pay and you would pay a matching portion of those taxes out of pocket (7.65% from her pay and you would 7.65% of 5,000 dollars gross pay). The employment tax you pay would be includible as part of the child care expenses for the child and dependent care credit. Your cousin would not be able to deduct expenses, but she wouldn't need to worry about self-employment tax either.
Since she is watching your daughter at her house, you could reasonably choose to treat her as an employee or as an independent contractor. Treating her as being an independent contractor is the simplest option, but it may cost your cousin more money.
If there are other questions or concerns, please reply to this answer so that I may assist you further. If this answers your question, please rate my performance between OK and Excellent Service so that I may receive credit for my work. Thanks for your business.
Ask Your Own Tax Question
Tax Professional: Phillip B, EA, Enrolled Agent replied 3 years ago
A colleague pointed me to an article about this very issue.
Given that the babysitting is performed out of your home, you should treat her as an independent contractor.
Here is a link to the article if you would like additional information on this subject: http://www.accountingtoday.com/news/tax-practice/conquering-the-nanny-tax-75070-1.html?utm_campaign=tax%20pro%20today-jul%201%202015&utm_medium=email&utm_source=newsletter&taxpro=1&ET=webcpa%3Ae4670271%3A2674149a%3A&st=email
Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Phillip B, EA Your Own Question
Phillip B, EA
Phillip B, EA
Phillip B, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 704
704 Satisfied Customers
Experience: Practicing since 2004. Expert in 1040, small business, represent vs. IRS, & int'l tax mattters.

Phillip B, EA 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

1,338 satisfied customers

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

Richard

Richard

Tax Attorney

4,512 satisfied customers

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

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

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

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 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.

< Previous | Next >

Related Tax Questions
WHAT SHAL I DO WHEN MY INDEPENDENT CLEENING CONTRACTOR IS
WHAT SHAL I DO WHEN MY INDEPENDENT CLEENING CONTRACTOR IS WORKING FOR ME 2X WEEK FOR 4HRS AS NEEDED. I AM 88 YEARS OLD, HANDICAPPED … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,665 satisfied customers
I'm a freelance writer and hire a babysitter to come over
I'm a freelance writer and hire a babysitter to come over each week so I can write. She's also our regular babysitter. She's worked with our family for 2 years, and I've never withheld taxes. When she… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
This is a question related to paying taxes help. We had red
This is a question related to paying taxes for household help. We had hired a lady to clean our home once a week (for $85 a week) starting a few years back. At the time she told us that she had her ow… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am considering ring an Independent Contractor Home Health
I am considering hiring an Independent Contractor Home Health Aide (part time, <20 hrs/week) to assist me in caring for my invalid mother. No nursing skills required, just assistance with grooming,… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My wife has a job now that does not take taxes out of her income.
My wife has a job now that does not take taxes out of her income. She says that they will give her a 1099 at the end of the year stating her total earnings. But I am afraid we have quarterly taxes due… read more
abci168
abci168
Principal
27 satisfied customers
Chris. My wife was asked to 1099 her personal assistant
Hi Chris. My wife was asked to 1099 her personal assistant from the salon owner from which she is renting a chair from. Perhaps to release some liability from the salon. The business is in California.… read more
abci168
abci168
Principal
27 satisfied customers
I have had a personal housekeeper for 13 years. When the kids
I have had a personal housekeeper for 13 years. When the kids were young, she came in one day a week. For the last four years, she has come in once every other week. She told me when I first met her t… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
hi, Phillip, I was reading your response about the babysitter
hi, Phillip, I was reading your response about the babysitter asking for a 1099 MISC. We have regular babysitter and in previous years we have done our own taxes separately. We applied for the child c… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
I have tax law question. Can a nanny and baby sitting service
I have tax law question. Can a nanny and baby sitting service company restructure its business to subcontract 1099 contractors to fulfill contract orders? Some other accountant said that the IRS reg s… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
My wife is 65 years of age, and she iss legally blind. We
My wife is 65 years of age, and she iss legally blind. We often have a friend who lives some 50 miles away come for several days each week to help us while I am gone to work. Because of the distance f… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
Am I self-employed if I had a W-2 then turned to a 1099?
I filed my 2009 1040 EZ March 10th 2009. I just received a letter from the IRS wanting me to fill out a Schedule SE. I work 2 jobs - one at Lowes, and at Homeowner Assistance Center. Last year at Home… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I am helping my daughter with her tax return, she had income
I am helping my daughter with her tax return, she had income on a 1099-misc, for a paid internship. The money received is under nonemployee compensation. how do I characterize this income, as wages, s… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
I have 1099-contractor worker question. Over 95% of our customers
I have 1099-contractor worker question. Over 95% of our customers are afro-americans and we are Asians. Business was slow and we assumed customers did not like to deal with Asians. So we hired her as … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My child is working, but no taxes of any type are being taken
My child is working, but no taxes of any type are being taken from her paycheck. I believe a W-9 was completed. How should we go about making sure that all taxes (state and federal), FICA and Medicare… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
My daughter just started a new job as a hair dresser. The
My daughter just started a new job as a hair dresser. The owner of the shop pays by personal check with no withholding. Since my daughter has never worked for an individual shop owner (she has worked … read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
How can I determine if my babysitter is an employee or an independent
How can I determine if my babysitter is an employee or an independent contractor? She had a child care business when we hired her, but she only cares for our children. She sometimes cares for our chil… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
We hired through an agency a nanny for our kids. They pay
We hired through an agency a nanny for our kids. They pay her and treat her as an independent contractor. we suppliment her pay. I was planning on giving her a 1099 form. Is this correct? Also do I ne… read more
MequonCPA
MequonCPA
CPA Firm Owner
Master's Degree
2,165 satisfied customers
my husbands employer sent us his 1099 late, when we got it ...
my husbands employer sent us his 1099 late, when we got it we pulled our bank deposits and found that she had put 5000 dollars more than what he made i asked her and she said she would send me a new o… read more
Marvin,EA
Marvin,EA
Enrolled Agent
Bachelor's Degree
1,605 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