Saturday, August 6, 2011

How do i collect my babysitting money on our taxes even though the ...

On their taxes and pay me in cash?

There are two types of workers, who are called "independent contractors" and "employees". they do taxes differently. if you are not sure which one you are, and no taxes were collected, then you are probably an independent contractor.

If you are an "independent contractor", then you must report the amount that you were paid on Form 1040 and on either Schedule C or Schedule C-EZ. if you were paid over $400, then you must also report it on Schedule SE. the family does not need to do anything. you can do all of these even if the family does nothing.

If you are an "employee", then you must, in this exact order:
1. ask them for a W-2.
2. Wait until February 15.
3. if you do not yet have the W-2, then report them to the IRS.
4. Wait until you get either the W-2 from the family or a "substitute form" from the IRS (the IRS mails this form after you call to report not getting a W-2, but only if you call after February 15, not if you call sooner).
5. File using either the W-2 (if you got it) or the substitute form (if you did not get the W-2).

Source: http://www.financetalkinghub.com/how-do-i-collect-my-babysitting-money-on-our-taxes-even-though-the-family-i-work-for-doesnt-collect-it.html

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