Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I paid my partner's niece who is 17 $1200 over the course of 2014 to watch our baby. I am claiming the child and I would like to claim this on my taxes for the dependent care credit. This is the only child care payments we made this whole year. She did watch the baby while I was working so I think it qualifies. It seems to me that she doesn't need to file a return since it's earned income and less than $6200. She will be claimed as a dependent on her mom's return. Should I file one for her as well. I am concerned that when the IRS cross references the SSN they won't see this amount anywhere. Or, will they see that she was claimed as a dependent and leave it at that. I'm trying not to get audited here
the only issue I would see is Nanny Taxes, but a quick check (as always consult real tax person for real tax advice) suggests that the limit in 2014 was $1900 for the year or $1000+ in a single quarter.
I paid my partner's niece who is 17 $1200 over the course of 2014 to watch our baby. I am claiming the child and I would like to claim this on my taxes for the dependent care credit. This is the only child care payments we made this whole year. She did watch the baby while I was working so I think it qualifies. It seems to me that she doesn't need to file a return since it's earned income and less than $6200. She will be claimed as a dependent on her mom's return. Should I file one for her as well. I am concerned that when the IRS cross references the SSN they won't see this amount anywhere. Or, will they see that she was claimed as a dependent and leave it at that. I'm trying not to get audited here
She will need to file (you don't file for her) and pay SE tax on the income but there should be no income tax. Also might be state tax implications depending on state of residence and/or employment. It's a very low exposure item and I'm not sure the IRS is sophisticated enough to cross reference the 2441 with the providers tax return.
You might be opening a can of worms by taking this deduction. When you hired her, did you get her social security number and tell her you would be reporting her income to the IRS so she would know to save money for taxes?
I believe she will need to file a Schedule C to report the $1200 and then pay the self-employment tax.
You'll get the credit and she'll pay the tax. That's how it works.
Care Providers - You must identify all persons or organizations that provide care for your child or dependent. You must report the name, address and taxpayer identification number (either the Social Security number or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10 (PDF), Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you cannot provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information. If you pay a provider to care for your dependent or spouse in your home, you may be a household employer. If you are a household employer, you may have to withhold and pay Social Security and Medicare taxes and pay federal unemployment tax. For more information, refer to Publication 926, Household Employer's Tax Guide, or Topic 756.
Look at Chart B of the 1040 instructions (page 8 of the 2014 instructions)
If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return. In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
Single dependents. Were you either age 65 or older or blind?
No. You must file a return if any of the following apply.
- Your unearned income was over $1,000. - Your earned income was over $6,200. - Your gross income was more than the larger of— $1,000, or Your earned income (up to $5,850) plus $350.
Edit: I don't think she has to file, contrary to my previous post. But that's really up to her parents and her to determine whether she doesn't have to file; maybe she has unearned income that you don't know about.
Last edited by arrieros81; 01-27-2015 at 06:51 PM..
IF you ...THEN you need to ...A–Pay cash wages of $1,900 or more in 2014 to any one household employee.Withhold and pay social security and Medicare taxes.
The taxes are 15.3%1 of cash wages.
Your employee's share is 7.65%1. (You can choose to pay it yourself and not withhold it.)
Your share is 7.65%.
Do not count wages you pay to—
Your spouse,
Your child under the age of 21,
Your parent (see Wages not counted, later, for an exception), or
Any employee under the age of 18 at any time in 2014 (see Wages not counted, later, for an exception).
B–Pay total cash wages of $1,000 or more in any calendar quarter of 2013 or 2014 to household employees.Pay federal unemployment tax.
The tax is 6% of cash wages.
Wages over $7,000 a year per employee are not taxed.
The OP won't have to file as a household employer and file Schedule H. The 17 yr old needs to file and pay self employment tax. The post above this referencing the wrong publication. All the OP has to do is claim the credit on form 2441 and show the girls name address and SSN. The rest is up to her.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
