Babysitting is a job that is likely not to be the first that comes to mind when you think about paying taxes due to the fact that, in most cases, it is a low-wage and/or temporary position.
However, there are some situations wherein you will need to pay taxes as a babysitter.
With this in mind, we are going to be taking a closer look at paying taxes as a babysitter, such as when you will need to do so and how you can go about declaring a babysitting position as income. Let’s get started.
Is Babysitting Considered Under The Table Work?
When we talk about under-the-table work, we generally mean work that is done off the official records and in an informal manner. Income is often not reported due to this informal nature.
Whilst this might seem like the perfect setup that takes away the difficulties and hard work that comes with filing taxes- as well as allowing you to keep hold of your hard-earned cash-, this is an often illegal practice in most cases.
Not paying taxes when you should be is considered fraud by the government, so be aware!
Babysitting is not under-the-table work, so as long as you follow the appropriate rules and regulations surrounding paying taxes when babysitting, which we will go into below.
Do Babysitters Have to Pay Taxes?
The answer to this question is that it depends on several factors, such as how much you earn by babysitting, how often you work, any other working situations you have, what country you live and such.
When Does a Babysitter Need To Start Paying Taxes?
Babysitting work is often paid via direct cash- which would be your gross income- by the family that you are working with. This technically makes the family, parent, or guardian of the child that you are babysitting your ‘employer’.
In most cases, the ‘employer’ in a babysitting situation won’t account for taxes or pay them for you according to your earnings.
Whilst this might not always be the case, the majority of babysitting work is done on a casual basis and so it is not going to be much of a surprise if it isn’t a topic of discussion that comes up.
It might be best to discuss the matter with the family- especially if you work with them regularly- in order to find out if your earned income needs to be declared.
In terms of what that taxable income is, a net income of $400 or more per year would mean that you would have to declare your babysitting income when the time comes to file your taxes. There are exceptions to this, though.
One particular example is if you regularly work for the same family, and you earn over a certain amount whilst working for them (the amount being around $2100).
If this is the case, the IRS will consider you as an employee of the household, but only if your babysitting work takes place at the house of those that you work for and not at your own house.
When it comes to this situation- wherein you would be classified by the IRS as an employee of the family- then the parents or guardians that you are babysitting for will be responsible for withholding any income tax as well as for filing taxes naming you as their “employee”.
Whilst you would be responsible for paying your income taxes in this situation, those that you are working for would need to take responsibility when it comes to withholding that tax from your pay.
If you are in this position but are unsure of how to go about finding out just how much of your pay will be withheld for taxes, then the IRS offers a tax withholding calculator where you can find a rough estimate of this figure.
This can be incredibly useful, especially if you’re not used to filing taxes! It is likely that this will either be a low figure or zero once the applicable tax deductions have been taken into account
How Do You Declare Babysitting Income In Taxes?
When it comes to declaring your income from babysitting, the first step is to make sure that you have all the necessary paperwork to hand.
If you do not receive receipts from your ‘employer’ for your babysitting work, make sure to chat with them to see if it is possible to start getting some written receipts from then on for your personal records.
This could be helpful for your employers too, as parents or guardians can sometimes claim babysitting fees as childcare expenses when filing a tax return form.
As we mentioned above, if you make more than $400 a year whilst babysitting, you will need to claim this in your taxes.
You might have to claim this as self-employment, but make sure to discuss this with the family that you are babysitting for beforehand. However- as discussed- the family will have to declare this for you if you make more than $2100.
If your job title is nanny rather than babysitter, it is likely that the family you are working for will be employing you directly.
This situation is likely to have a different tax situation in comparison to that of a babysitter, such as other employment taxes that your ‘employers’ will have to pay out for you on your behalf.
Babysitters only have to pay taxes when they earn over a certain amount of money- as we talked about above-, but if you are ever unsure of whether you need to do so when babysitting, make sure to have a thorough discussion with the family you are working for as well as a tax specialist or account so that you don’t end up accidentally avoiding your taxes!