(U.S.) Help me not commit tax or wage fraud, please.
I’m trying to understand how to handle taxes with my babysitting situation.
For the last year my aunt has watched my baby. Sometimes she watches my toddler at her house but other days she comes to our house. So I don’t think she’s really a “household employee.” I’d guess he’s at her house 70% of the time.
We pay her, but not a lot - she’s doing us a big favor because we are family and she’s a lovely, generous aunt.
I’ve been getting reimbursed from my dependent care FSA and claimed the child tax credit. I know she reported the income on her taxes and we made sure everything matched. So I think we’re ok there?
But now my aunt is moving on and we need a new babysitter. We interviewed someone today but found out she wanted to be paid under the table as she can’t legally work on her student visa. Hard pass from us.
The next person I’m interviewing is a SAHM with one baby. She wants to watch my baby for a bit of side income. It would only be two days a week at her house.
Can I just tell her I am only interested if everything is above board and she claims the income so I can claim the child tax credit? Just want to make sure that is the right thing to do from a tax perspective.
It’s confusing to me when it’s not a nanny/household employee but also not a daycare. Also, what she told me her rate is is below minimum wage. Does that matter if she’s setting her own rate and I’m not taking her on as an employee?
Submitted May 02, 2024 at 10:43PM by anotherbasicgirl https://ift.tt/gkL4rzR
