Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
View Poll Results: Would you push her on the issue of claiming childcare costs?
1. Get her to allow the claim 0 0%
2. Just let it go 0 0%
3. Other 1 100.00%
Voters: 1. You may not vote on this poll

Reply Start New Thread
 
Old 01-13-2022, 03:25 PM
 
Location: Chicago
3,867 posts, read 6,773,234 times
Reputation: 5418

Advertisements

Last year we signed our daughter up for in home daycare. We drive her to a woman's house who watches her and ~6 other kids for $65 a day.

The cost for our area is very reasonable as typically places charge $85 a day or more and they don't have flexibility to not pay for days you don't need them to watch your kids. My wife is a teacher so she gets summers off and lots of holidays and this woman doesn't charge us for that time.

I asked her about claiming our child care costs for our taxes and she casually mentioned that with cash customers she doesn't report the income. She asked if we wouldn't claim it. We really like her, as does our 1 year old. She has taught her sign language and is overall really good and comes highly recommended among local parents.

Moral stance aside and speaking strictly financially, what would you do?

1) Demand she allow us to claim the costs for a refund on our taxes
2) Give her a break and don't push it since she is convenient, close, does a great job, and other places are more expensive.
3) Other - Work out a compromise, switch providers all together.

Curious to hear everyone's thoughts!
Reply With Quote Quick reply to this message

 
Old 01-13-2022, 03:28 PM
 
5,897 posts, read 4,385,699 times
Reputation: 13411
Why did you think she was cheaper? Tax fraud and/skipping out on other compliance for health and safety other businesses must follow.


You want to unfairly price arbitrage and pay less than everyone else and get a tax deduction too?
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 03:38 PM
 
Location: Chicago
3,867 posts, read 6,773,234 times
Reputation: 5418
Quote:
Originally Posted by Thatsright19 View Post
Why did you think she was cheaper? Tax fraud and/skipping out on other compliance for health and safety other businesses must follow.


You want to unfairly price arbitrage and pay less than everyone else and get a tax deduction too?
We had no reason to think it was cheaper other than being an at home daycare situation. She wasn't upfront about skipping claims and just said she preferred to be paid in cash, which we did.

She is also licensed and insured, we made sure of that before signing up with her. The only thing she doesn't have is the certification on her home to be certified safe for daycare (home is pretty old).
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 03:41 PM
 
5,897 posts, read 4,385,699 times
Reputation: 13411
Quote:
Originally Posted by ChiGuy2.5 View Post
We had no reason to think it was cheaper other than being an at home daycare situation. She wasn't upfront about skipping claims and just said she preferred to be paid in cash, which we did.

She is also licensed and insured, we made sure of that before signing up with her. The only thing she doesn't have is the certification on her home to be certified safe for daycare (home is pretty old).
You know now.

It’s kind of a “if it sounds too good to be true, it’s probably is” type of thing. You know she’s cheaper. You know she’s asking for cash. You know she’s more lenient on no shows (because she’s not running a real, business).

I don’t know the significance of the home not being certified, but hypothetically, maybe without that certification, she’s also skipping out on home insurance/liability costs. That’s another red flag to me.

The answer I’d say, is given what you know, it’s best to end that customer relationship (if you want to rope moral considerations back in) or expect to lose out on the legitimacy of the tax deduction in leu of your artificially lower cost since you’re already inadvertently/indirectly benefiting from her felony tax evasion (if you want to strictly look at dollars and cents).

Last edited by Thatsright19; 01-13-2022 at 03:52 PM..
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 04:02 PM
 
15,608 posts, read 7,621,089 times
Reputation: 10875
We had this happen with a sitter who was just minding our 2 kids. We used her for like 3-4 years and it started to add up. My husband let her know that we'd be claiming her and the next day she quit.
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 04:09 PM
 
2,733 posts, read 1,750,747 times
Reputation: 4395
Let's see, if you claim the costs and she drops you as a customer, what will it cost to place your child somewhere else and will you like them as much and will they have the same flexibility?

Answer seems obvious.
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 05:29 PM
 
Location: Censorshipville...
4,368 posts, read 8,050,013 times
Reputation: 4882
Quote:
Originally Posted by ChiGuy2.5 View Post
Last year we signed our daughter up for in home daycare. We drive her to a woman's house who watches her and ~6 other kids for $65 a day.

The cost for our area is very reasonable as typically places charge $85 a day or more and they don't have flexibility to not pay for days you don't need them to watch your kids. My wife is a teacher so she gets summers off and lots of holidays and this woman doesn't charge us for that time.

I asked her about claiming our child care costs for our taxes and she casually mentioned that with cash customers she doesn't report the income. She asked if we wouldn't claim it. We really like her, as does our 1 year old. She has taught her sign language and is overall really good and comes highly recommended among local parents.

Moral stance aside and speaking strictly financially, what would you do?

1) Demand she allow us to claim the costs for a refund on our taxes
2) Give her a break and don't push it since she is convenient, close, does a great job, and other places are more expensive.
3) Other - Work out a compromise, switch providers all together.

Curious to hear everyone's thoughts!
Sometimes doing the right thing is not necessarily the easiest or cheapest method.

How do you feel that she's not contributing to the greater good by not paying her fair share in taxes?

If she's being dishonest with her taxes, what else is she lying about?

Stop paying cash and instead with a credit card that can be tracked.
Reply With Quote Quick reply to this message
 
Old 01-13-2022, 05:59 PM
 
5,897 posts, read 4,385,699 times
Reputation: 13411
Quote:
Originally Posted by oneasterisk View Post
Sometimes doing the right thing is not necessarily the easiest or cheapest method.

How do you feel that she's not contributing to the greater good by not paying her fair share in taxes?

If she's being dishonest with her taxes, what else is she lying about?

Stop paying cash and instead with a credit card that can be tracked.
In a way, it’s not actually her that’s getting the (majority of the) benefit of not paying the tax, it’s the person buying the service. If she had a real business, she would budget in the full cost of providing the service, including the income tax liability of doing so (assuming the service had enough market power to get cost plus profit).

So, by just charging the cost net of tax to attract unearned business, she’s still most likely materially getting what she would after tax anyways. The person benefiting is the one paying less than other people struggling to pay for their own kids daycare honestly. It’s the OP who is ultimately reaping the lower cost than the rest of society. Now, I’m not saying that as an accusation, just a simple accounting of the flow of the value. The daycare provider may be taking some of this value back depending how much they’re being paid, but most of the savings actually falls to the buyer of the service. Also the value would be altered by the marginal tax rate of each side.

If they actually did it intentionally, now they’re wanting to double dip with a tax deduction/credit on top of it. Again, not saying that’s the Ops intent.


As for the OP, when you deduct child care costs, you have to provide the name, taxpayer ID, ect. You can report without that assuming you’ve done your due diligence. So, since this could very well be not something you wanted to take advantage of, you could probably claim the legitimate expenses you made for this 1 tax year…but now that you’ve done your due diligence and realize they’re not going to provide this going forward, you should seek a new provider. That’s pretty much your moral and legal “out”.

Last edited by Thatsright19; 01-13-2022 at 06:34 PM..
Reply With Quote Quick reply to this message
 
Old 01-14-2022, 07:21 AM
 
9,720 posts, read 7,546,577 times
Reputation: 24128
I would let it go. This is something that should have been talked about when you first interviewed her, not at tax time.

How much money would you get back if you take the credit? By taking the credit, you are essentially just transferring the tax burden to her. If she knew you wanted to claim the credit last year, I'm sure she would've adjusted her prices to cover that tax.

I know a lot of very good in home child care providers that closed their doors when this credit came about 30 years ago. I just have a soft spot for moms that stay home and care for other people's children 9-10 hours a day.
Reply With Quote Quick reply to this message
 
Old 01-14-2022, 11:35 AM
 
37,426 posts, read 45,623,586 times
Reputation: 56764
Quote:
Originally Posted by ChiGuy2.5 View Post
Last year we signed our daughter up for in home daycare. We drive her to a woman's house who watches her and ~6 other kids for $65 a day.

The cost for our area is very reasonable as typically places charge $85 a day or more and they don't have flexibility to not pay for days you don't need them to watch your kids. My wife is a teacher so she gets summers off and lots of holidays and this woman doesn't charge us for that time.

I asked her about claiming our child care costs for our taxes and she casually mentioned that with cash customers she doesn't report the income. She asked if we wouldn't claim it. We really like her, as does our 1 year old. She has taught her sign language and is overall really good and comes highly recommended among local parents.

Moral stance aside and speaking strictly financially, what would you do?

1) Demand she allow us to claim the costs for a refund on our taxes
2) Give her a break and don't push it since she is convenient, close, does a great job, and other places are more expensive.
3) Other - Work out a compromise, switch providers all together.

Curious to hear everyone's thoughts!
When I used a private in-home person to take care of my son, it was a cash deal. No taxes. Once I used a daycare center, then that changed. I would absolutely let it go. One of the reasons that she is cheaper, is because she does not have to pay taxes. Can't believe you would even think of insisting on that.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top