Jan
My wife babysits one child for a friend of ours. She was paid approximatley $1400 for the year. We do not run a daycare service, this is more of a favor with the benfit of some income. I would assume our friends report the payments to us as a childcare expense.
Answer:
Yes, you must report it.
BTW, it IS a business as far as the IRS is concerned! You'll have to pay self-employment taxes on the net profit, plus income taxes. File Schedule C or C-EZ to figure the net profit. If this is more than $400, also attach Schedule SE to calculate the self-employment tax.
Answer:
TFTP Report It
Answer:
Legally you have to report it. Further, if your friends are claiming a deduction for what they paid your wife they are going to be asked to provide your wife's information.
Answer:
You have to report every source of income.
Answer:
It is by definition a business for tax purposes, and needs its own schedule C since it's a totally separate business from the other one. Those will both show on the same schedule SE and form 1040 though.
Answer:
If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you.
If you provide childcare, either in the child's home or in your home or other place of business, the pay you receive must be included in your income. If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C (Form 1040),