Babysitting taxes USA: what you need to know
Have you ever wondered if babysitting is taxable in the US? Do you know how to file taxes for babysitting income? Don’t worry, our tips will help highlight what you need to know about your babysitting income tax!
Do babysitters need to pay taxes?
It depends. Whether or not you need to pay taxes as a babysitter depends on your country, how much you work, how much you earn, and other factors about your working situation. So, it all depends on these factors about whether or not you are allowed to skip the taxes or get paid in cash.
When is it necessary for babysitters to pay taxes?
As a babysitter, you are generally paid a gross income by the family you are working for. Your ‘employer’ (the parent/family) often does not account for and pay taxes for you ahead of time, based on your earnings.
In this case, the babysitter does still have to check if they need to declare their earned income to the government tax authorities.
How much taxes do babysitters need to pay?
Depending on the number of hours you work and your work situation, you may not need to be officially ‘employed’ by the family you are working for. In this case, they don’t need to withhold taxes from your income. However, if they don’t withhold taxes and you earn above a certain threshold, you still need to declare this income when filling out your income tax and tax return.
Is babysitting working under the table?
Under the table workers generally are paid in cash, and this practice in many cases can be quite common when it comes to babysitting. The benefit? Neither the family nor the babysitter has to go through the extra work or earn less due to taxes.
Working under the table may look more beneficial or valuable, however, don’t forget that in many cases this can be illegal. If you earn large amounts of money and don’t pay taxes on this, this can be seen as fraud by the government.
So, the big question is: ‘is babysitting working under the table’? In short, the answer to this is no, however, you do need to follow a few rules in order to avoid it becoming working under the table. This can depend on what country you live in.
Check below to see the regulations for your country.
Babysitting taxes in the US
Often, babysitters in the US are paid cash and paying taxes on this is not always the first thing that comes to mind. However, that doesn’t mean that it isn’t necessary to pay taxes.
When do you need to pay taxes as a babysitter?
If you earn more than $400 (net income) in a year, you’ll need to declare your babysitting income when filing your taxes.
However, there are exceptions. If you earn more than a certain amount (around $2100) while working for a single family, you’ll be considered as a household employee by the IRS. This is however, unless you take care of the child at your own house, and not at the family’s house.
In this case, this family would be required to withhold income tax and file taxes with you as their “employee”. So, the babysitter in this case is required to pay income taxes on babysitting, however, the family would be responsible for withholding this from their pay. In this case, babysitters can use the tax withholding calculator from the IRS to estimate how much would be withheld from their pay for taxes.
Likely, the taxes due or pay withheld for taxes will be quite low or zero, taking into account applicable tax deductions.
How to declare your babysitting income
It is always useful to collect your receipts from your babysitting payments. Sometimes parents may claim the transactions as childcare expenses on their tax return form. Therefore, it may be required that you as a babysitter need to claim your babysitting income under self-employment if you make more than $400 in a year. You should always discuss this in advance with the families you babysit for.
As mentioned above, if you earn above $2100 working for one family, they will be required to declare taxes for you.
If you are a nanny, you will likely be employed directly by the family and have different tax situations than that of a babysitter. This may include other employment taxes that the family is required to pay on your behalf.