How do I document I pay a babysitter?
marelbe75 asked:
For tax purposes, how would I document I pay a babysitter. Do I write a check, do we deal with receipts or what?
For tax purposes, how would I document I pay a babysitter. Do I write a check, do we deal with receipts or what?
If this is a babysitter who sits your child (and other children) in her own home:
1. Pay by check.
2. Give her a W-10 before you start the relationship.
If this is a babysitter who sits in your home, then she’s your employee and there is more paperwork to do since YOU are the employer and would issue her a W-2.
Both your canceled check and receipts if possible.
And if you want to save yourself a huge and very common end-of-year hassle, get your babysitter’s Soc Sec Number or EIN number NOW instead of waiting until the year end. They are required to give it to you and you are required to have it if you want to claim the Child Care Credit, but with all the identity theft issues, lots of people including babysitters are hesitant to give them out. You may have to convince her that she is required to. You could download Form W-10 from to give her. It is an official request for such a number.
Checks are good because you can track it.
It also depends on where the babysitting is taking place. If it is taking place at your home, the babysitter is considered an employee. With that scenario, the babysitter can complete a W-4 form and you are to withhold FICA and possibly federal and state taxes where applicable. You are also responsible for half of the FICA (employer pays 7.65%, and employee contributes 7.65%). You will be required to file a W-2 form to the babysitter and the IRS early each year.
If the babysitting is done at a different location, such as at the babysitter’s home, then the babysitter is considered self-employed and you are not responsible for withholding taxes. You are responsible in providing a 1099 form to the babysitter when tax time comes (early each year) so he/she can file for income tax. The babysitter will be responsible for his/her own tax payments.
In regards to the babysitter refusing to give you his/her SSN, here’s what the IRS says:
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My babysitter refused to provide me with her social security number. Can I still claim the amount I paid to the babysitter for child care while I worked? If so, how do I claim these child care expenses on my tax return?
Yes, if you meet the other requirements to claim the child and dependent care credit, but are missing the social security number or other taxpayer identification required ID number of a provider, you can still claim the credit by demonstrating “due diligence” in attempting to secure this information.
If a provider of child care refuses to give the identifying information, the taxpayer can still claim the credit however, the taxpayer must provide whatever information is available about the provider (such as name and address) on the form used to claim the credit Form 2441 (PDF), Child and Dependent Care Expenses, or Form 1040A, Schedule 2 (PDF), Child and Dependent Care Expenses for Form 1040A Filers). The taxpayer should write “see page 2″ in the columns requesting the missing information. The taxpayer should write at the bottom of page 2 that the provider refused to give the requested information. This statement will show that the taxpayer used due diligence in trying to secure and furnish the identifying information.
For more information refer to Form W-10 (PDF), Dependent Care Provider’s Identification and Certification, the instruction for Form 2441 (PDF), Child and Dependent Care Expenses, Publication 503, Child and Dependent Care Expense, or Tax Topic 602, Child and Dependent Care Credit.
What wanosd said is correct. I would only add that if she refuses to give you her SS#, that you can still get the childcare credit, but you need to mail the return in and cannot e-file it.
Send in a Form 1099 to the IRS every year. A copy goes to the babysitter. Very easy. I get help at the IRS 800-829-1040. They are nice.
get a receipt and do not forget to write in your diary date and time of your monthly payment in case the receipt lost.
( write your receipt number )