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I have a question about self employment taxes our nanny is…

I have a question...

I have a question about self employment taxes our nanny is paying

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

We hire a stay at homeom

Accountant's Assistant: Is there anything else the Accountant should be aware of?

We hire a nanny to watch our daughter- she watches her in her home. This year is only amounted to $4600. She isn’t married so she applied as a single, self employed in childcare. It’s saying she owes 573 in self employment taxes which we weren’t expecting. We want to see if we can lower that by deductions. Can she deduct rent since she provides care out of her home?

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Answered in 6 minutes by:
3/28/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,319
Experience: Taxes, Immigration, Labor Relations
Verified

Yes - she may deduct expenses for the business use of her home.

It might be either to deduct using simplified option which can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses.

Standard deduction of $5 per square foot of home used for business (maximum 300 square feet).

That will include all related expenses.

Let me know if that works for your situation.

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Customer reply replied 4 months ago
That’s great news. So she would just enter the $1500 as a itemized expense for rent and that’s all she needs to do?

That is not itemized expense - that is business related deduction for the business use of her home.

That deduction will be reported on schedule C

see line 30

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

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Customer reply replied 4 months ago
Ok perfect! Thank you for your help!

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 with all Social Security / Tax related issues.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,319
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