Discussion:SE tax and babysetting
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Discussion Forum Index --> Tax Questions --> SE tax and babysetting
| 2 February 2006 | |
| If a taxpayer who has a W-2 wage and babysets a child for her sister and gets paid to babyset.
Is the babysetting income subject to SE tax or just reported as misc income on front of 1040? | |
| 2 February 2006 | |
| Alot would depend upon the facts and circumstances. However, in many cases casual babysitting for a relative with small amounts paid generally does not involve a profit motive. In that case I would report the gross as other income, with any expenses (up to income) taken as a 2% miscellaneous itemized deduction. | |
| 2 February 2006 | |
| What if the situation was a husband and wife, with the husband earning a W-2 wage and the wife babysetting a couple of children that are not related to her, and earning $5000.00 or $6000.00
per year with minimal expenses, in order to make a little extra spending money? | |
| 2 February 2006 | |
| A trade or business must be continuous, regular, and substantial to be classified as such. This activity seems to satisfy all three criteria. | |
| 2 February 2006 | |
| How old is the taxpayer? They may not need to pay SE tax. | |
| 2 February 2006 | |
| The taxpayer in the above example is 25. I also have a taxpayer who's daughter is 16 and she babysets on occasion, she does not look for babysetting people just ask her to. She makes about 1000.00 per year. Sounds to me based on Riley2 answer, that she would not have to pay SE. | |
| 2 February 2006 | |
| I have never heard of it called "babyset", I believe it is babysit. A 25 year old person that babysits and nets more than $400 has to pay SE tax. There is nothing unique about babysitting. She can offset the income by her expenses including her business use of her house if she is babysitting in her own house. | |
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