Can a private childcare provider file taxes?
I am considering providing childcare within my home. I have one child of my own and plan on providing care for 2 other children. Can I file taxes as a childcare provider? If so, what do I need to do in order to file? And what would I need to prove I provided childcare for my tax preparer?
Public Comments
- Yes you have to file like a person that runs their own business because that is what you do. Self employed forms are available at IRS.GOV
- You not only can, but are required to if you make over $400 a year at it. You'd take your records showing your income and any associated expenses to your tax preparer. Keep receipts for expenses.
You'll be filing a schedule C or C-EZ to show your income and expenses, a schedule SE to calculate your self-employment tax for social security and medicare, and a form 1040.
- You have to file a Schedule C (business income/loss), Schedule SE (if you make a profit of at least $400), and Form 8829 (business use of your home). If you make enough money, then you may be required to make estimated tax payments every 3 months. This is all in addition to the forms you already need to file as an individual. You will also need to provide a statement to all of your parents at the beginning of every year telling them how much they paid in child care for the previous year. This must also include your social security number.
You need to make sure that you keep receipts of all expenses directly related to your business, keep track of all expenses for your home (you may be able to deduct a portion of your home expenses now), and keep track of all your revenue. You don't need to prove anything to your tax preparer. You would need to prove it to the IRS if they want to see proof. The preparer will probably go with whatever numbers you provide.
It is good that you go with a preparer, the forms you need to file are a lot more confusing, your tax burden will go up (thanks to social security and medicare), and your likelihood of an audit go up (you will have a lot more ways to cheat). Go with a preparer that will give you attention throughout the year and not just at the beginning of the year.
