I have a question about childcare provider taxes. If I’m a childcare provider without a W-2, how do I file taxes for childcare income I earn?
The IRS usually considers childcare providers as independent contractors. Since independent contractors are self-employed, you should report your income on Schedule C.
Also, if your income minus expenses from self-employment is more than $400, you must file Schedule SE. This will determine your taxes for childcare.
However, if a state health and welfare agency pays you to care for the children of public-assistance recipients, you’re performing chore services, which will change the childcare provider taxes ramifications. Since the state agency controls your wages, it should issue you a W-2 and withhold your childcare provider taxes. However, if you receive a Form 1099-MISC, do both of these:
- Enter the payments as wages.
- Attach a statement to the return explaining the nature of the payments.
If you’re itemizing deductions, the IRS generally allows you a medical expenses deduction if you have unreimbursed expenses that are more than 7.5% of your adjusted gross income for tax years 2017 or 2018. You can deduct the cost of care from several types of practitioners at various stages of care.
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