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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29970
Experience:  Taxes, Immigration, Labor Relations
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I am a single working mom. I make less than $25,000 a year.

Customer Question

I am a single working mom. I make less than $25,000 a year. A large chunk of my paycheck goes towards childcare. I believe I would probably qualify for some sort of government assistance for child care. I have actually looked into it but it has to be a licensed day care. There are no licensed day cares within 40 miles of where I work. I pay out of pocket for a babysitter to come to my home and watch my children while I work. My question is- what are my requirements as far as showing I pay this money out to the baby sitter? Do I have to have employee taxes? Do I just send a 1099 at the end of the year? How much am I able to pay out per year without having to report, if any?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Your information is not exactly correct - form 1099misc is for business reporting only.See instructions first page - right columnTrade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable.So these are personal services - and form 1099mist is NOT needed..What you need to do - the first step is to verify if the babysitter is your employee or she is a self-employed contractor.If she is your employee - you would have additional obligations and should issue her form W2.If she is not your employee - nothing is reported - but you will provide her a letter indicating the amount paid to her.
Expert:  Lev replied 1 year ago.
If she is your employee...1.If there are employee-employer relations - wages are reported on W2 form - not on 1099MISC.2.Employment taxes include social security and Medicare taxes - total 7.65% are paid by the employer and 7.65% are withheld from wages. In case of household employees (babysitters and nannies are generally included into this category) - the employer may choose to pay employee's portion instead of withholding from wages
Expert:  Lev replied 1 year ago.
3.The best resource for your situation is the IRS publication 926 - see page 9 - How Do You Make Tax Payments?When you file your 2015 federal income tax return in 2016, attach Schedule H (Form 1040) to your Form 1040. Use Schedule H to figure your total household employment taxes (social security, Medicare, FUTA, and withheld federal income taxes).Add these household employment taxes to your income tax. That would be on your form 1040 line 59aPay the total amount due by April 15, 2016.There is no separate tax payment for your household employee because that amount is included into your federal tax return. She will use W2 form to prepare her tax return..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.