Do I Need to File Self-employment

Yes, you need to keep good records and pay taxes on this income. Here are two IRS publications I recommend.

Tax Guide For Small Business (For Individuals Who Use Schedule C or C-EZ)
http://www.irs.gov/pub/irs-pdf/p334.pdf

Starting a Business and Keeping Records
http://www.irs.gov/pub/irs-pdf/p583.pdf

Since you will be keeping others children what is going to 'protect' you the most? Understanding these are your husbands co-workers, but you are keeping their kids, and people are more protective these days. I would be more concerned about that issue that the issue of taxes. Do you have the experience, first-aide & CPR certification. My son was at an in-home lincesed sitter, and I had no problems. But I have also know people who used only a registered sitter, and they had issues. Just do research on both, and look at what will benefit you the most

No you do not have to get a license or register if you only have three kids. But make sure you reduce risk at all costs. Child proof. I have a registered day care but it is my business and I have as many as 7-9 at times. Go to the standard rules because from what I keep hearing is others who have watched kids always tell me that come Friday the parents ( also parents who seem to pay the least) never have the money. They let it slide. That is an advantage of being registered. The state inspects and the food program make sure the kids are fed every 2-3 hrs. And healthy food. The risk and as we all know today people are sue happy. Also I have a sign in and out sheet that keeps also track of their coming and going. If they report it on their taxes then you have to report it on yours as income. Lots of things to think about. Go to www.dfps.state.tx.org and look at the huge guidelines of standard rules. I had to make up policies that took me a long time and still I keep revising it. Each one is important. Things like making sure the kid does not have allergies. Getting CPR and First Aid training. Education in children and how to protect ourselves. A situation totally out of my hands happened a yr ago with a father that sexually advanced himself on his 3 yr old daughter. I had to go to court and his mom was wealthy. They sent in complaints about my day care sending investigators my way. Found nothing but never in my day thought I would be involved in such a thing. The girl told mom and me then therapists started and grandma tried to get me closed, so the kids could not come to me at night or week ends. Then after the state said I really do not need them in my Day Care and the grandma forced the issue I lost $1200 that month they had to quit. Today the mom would have me back but it is not worth it. She was pulling down her pants in front of my little boys, masterbating and nasty. Not her fault but the judge said there was not enough evidence and gave the grandma and father more access. So beware. This is a brutal business. Hard work too. I just took of a Friday and Monday off and my least paying customer chewed me out that he expects me to be here and that is what he pays me for. I just let it go in one ear and out. He is a pain, and if I get two more kids, he is out. He is part time and most pay full time no matter what. I guess if I had charged him for the week every week he would not be getting that break. Everyone needs to know that Home Day Cares, they need a back up because we have to take time off for training. We get sick, we need R& R here and there to be the best we can be for our children. So think about it, go through the risks and see if you still want to do it. Those who seek friends usually want it cheap and it costs a lot to run this business. I have tons of toys that they may break. I have paper plates and sippy cups and laundry because they need mats to sleep on and everythings gets bleached, which lots of times takes all week end. Good Luck wage the cost of high electric bills and water because they are used all day long. Food is a huge expense, I cook all day. And nap time is a blessing to me if they all sleep at the same time. Hard work and rough on the back picking up children.Activities are getting more and more hard for me to come up with and they get bored. But food is good and nap time and music. We paint or color or everyone needs to have outdoor time when weather permitted. You have to know and have it in writing all your rules and expectations. If you do not they will take advantage of you every time. I have people getting in later and later. If they do not pay on Friday it is a $20 a day per child late fee. But now I have to charge two weeks in advance as I just had my third child walk on a Friday and what I expect in income went down. I just get going and someone loses a job or moves or something without even any notice you are prepared to have their child and they do not show. You can not even take pictures without parent permission signed. You can not take them anywhere without permission. They may be allergic to bandages and you have to know. I had a child play in my flower bed and got into ants. She had a dirty diaper and they attached the dirt. Ran her into a bath. I have probably $4K in toys and equipment. From High Chairs. Beds and I provide mats and covers and pillows and blankets I wash every week. I also have computer stuff for the kids to learn. We become teachers without even knowing it. My focus in on becoming kind caring individuals. Setting goals and solving problems. If you taught school you probably have a good insight on having children but I found under 2 they are a pain. They cry when you are trying to fix a meal. Some will not sleep unless rocked for an hour. Parents will spoil them and give them foods that are not healthy like coke in a sippy cup and you have to have that stated. I also have problems when parents give thier children money which they can swallow and I take it away. Toys brought from home become a problem because everyone fights over that one toy. I also have stated anything over $10 if they on purposely break it the parents are liabile. If you have a contract I was told by an attorney that as long as both agree and you have it in there they agree to the terms then it will hold up in court. Also the pages have to be numbered in a way that say 1 of 10 or whatever. God Bless. G. W

Not sure about taxes yet, I'm going to have to figure that out as well, but no, you don't need to get licenced. You do need to get listed though. It costs $20 and all it does is put you on the state's website as a provider and they will run a background check on you and your husband. Easy. You only need to get registered if you keep more than 3 unrelated children.

Well, you have 2 separate issues. The licensing you would have to check out with your local authorities, each county, city and area would have their own laws and applicable regulations. You also need to consider your neighbors and neighborhood. They may have their own rules, especially an HOA covered development. You don't want trouble with your neighbors. There are some individuals that pretty much spend their time looking for something to complain about so you have to think of that. Also, some HOA's specifically deny the home being used for any sort of income producing endeavors. Crazy I know.
Secondly, the income itself is a whole nother ball game as they say. If these families just want excellent care for their babies by someone they know they might agree to just pay you "under the table", thereby not claiming it on their income taxes. You need to clarify that upfront. By IRS regulations if a person pays for childcare services they can possibly deduct that from their income taxes as a child-care expense. This involves stating whom they paid and how much. Which would bring it back to you as income. To avoid these hassles and potential problems I would suggest that you say: "Sure, I can watch baby Joe, and you can just give me $100.00 CASH every week to cover the expenses." I have no idea what childcare costs these days or how many hours you'd have these children so I'm sure that varies and so would the $ value. If there is a papertrail, say, payments made to you by check, you may end up being liable for any taxes on this. I would caution you to be very careful all the way around. When it comes to money and taxes all of us can get testy. Another issue you need to think about is liability. What if one of these children gets hurt in your home? It's a very real possibility and you need to consider it...If you own your home you may need to ensure your insurance would cover you for providing childcare in your home. It's a lot to consider; I cared for children in my home for a number of years. It's rewarding and does help with extra income to be home with your children. But please also remember that with 2 other babies you would have to divide your time. If yours is crying and so are the other 2, who would you tend to first?! Then there is feeding, changing and they will be crawling around pretty soon. Also remember that this will be work. You can't easily pack up 3 babies to run to the grocery store or on errands. I don't mean to discourage you, just want you to really think about what you're getting into. Might I suggest starting with just 1 baby to care for along with yours and see how that goes and then maybe add the 2nd? Best of Luck to you and I hope it all works out well!

If you have any kids, that are not your own, in your care on a regular basis, you are suppose to get 'listed' with the state. If the number of kids exceeds 3 (other than your own) then you need to get 'registered' with the state. Cost is minimal for both.

I used to be a Day care provider out of my home when my kids were little. For as little as it cost to start up, I would do it. It covers your butt and looks really good to the other parents. Even if you know them before you are registered. There are 2 different levels. There is listed (I think) and then there is registered. Just depends on how many kids you want to keep. I would look here http://www.dfps.state.tx.us/ to get all of the information. It is not hard to do and makes everything legal. Plus, you really get alot of benefits on your taxes. It is not as hard as you think. Hope that helps.

H.
http://www.havenssweetscents.webs.com
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Missy makes a good point, if you have not had basic first aid training including cpr and Heimlich, you need to do that before you start keeping other people's children because beyond the legal ramifications, you don't ever want to have something happen that you would spend the rest of your life living with. My daughter wound up having a breathing incident that put her in the hospital at 9 days old and they taught us the infant cpr before we went home but I wondered, why when they won't let you out of the hospital without a car seat, do they let you take the kid home without the basic life-saving knowledge of cpr? Your son is small, you also need to go through your entire house and make sure it is child-proofed adequately for older children, which means getting down on your hands and knees and seeing all the possible dangers that you haven't dealt with because your son is not yet ambulatory.

If you earn more than around $300 a year doing anything you pay taxes on it. Watching 2 children that are not your own does not require being licensed as a day care because it is considered babysitting. I assume that your husband's colleagues are going to claim the day care expense and unless they pay you in cash there is a paper trail.

I have been working at home for 13 years, keeping track of the receipts is easy, throw them in a folder and get your paperwork together when you do your taxes. Ihave never paid quarterly taxes, it is a choice. You can pay them at the end of the year and essentially, what your husband pays in that would be refunded is applied to your social security. One thing I would recommend is setting something aside every month in case his overage doesn't cover what you should pay in. That way if you have to write a check, the money is there. Also, don't ever claim anything you do not have a receipt for.

I have numerous friends, roofers, other jobs, that are considered self-employed and they will claim stuff they have no receipts for, which is fine if you never get audited but not only will they up your net income to match the undocumented expenses, they may decide to crawl up you know where with a microscope. Much easier to bite the deduction if you can't find a receipt than to chance it.

Also, you will be able to take a portion of your mortgage and all utilities to the business without ever registering as a business or licensed daycare if there is a portion of your house that is pretty much used for nothing but business. Add up the square footage of a play area, if you start to keep filing anywhere. If you get a shelving unit for the garage to keep the children's belongings. Add the square footage of that, divide it by the whole square footage of the house, and you have your percentage of utilities and rent that can be billed back to the business.

You might be better off asking the guys to pay with checks because you can easily copy them on your printer (if you don't have one that is a printer, copier, scanner, you can get one for under $80 and it would be a good tool for you). That allows you to keep easy records of the income that you should create a microsoft word doc to give to your CPA or H & R Block. One for income, and several for the expenses. The rent/utilities, receipts for food, wipes, kleenex. That means when you pick up something at Walmart, circle the item and throw it in the file.

Hope this helps and feel free to contact me if you have any questions. This doesn't have to be complicated but if you don't keep good records, you are not taking the appropriate step of reducing the income by the expenses to run the business. Also THINK OF IT AS A BUSINESS NOW. It took me several years to really get that I owned and ran a business rather than some little making extra money gig. That thinking will be helpful in making sure everything is cool with taxes, etc. Also, as I have had friends do this, you need to set up rules like a regular daycare.

For example, when they will be dropped off, if they plan to keep a car seat with you or leave it when they drop the child off, or do they have a problem with you running errands, goin to the park, etc. with the children. What time will they be dropped off and picked up. I would specify that an occasional problem that will leave the child there late is not a problem but if it becomes chronic, the easiest way to stop it is to charge them for picking up the child late. Think of every hitch that could happen. If someone forgets formula, etc. You need to figure out how far your responsibility goes for taking care of the kids. Don't make the mistake of assuming that people won't take advantage of you because they are friends. I am not saying they will do it on purpose, but friends who have done this have had problems setting boundaries when they didn't really have them to begin with and then had to implement them because the clients start acting squirrely.

One of my friend's clients was a hair dresser. She was chronically late dropping the kids off and often picking them up if she had a walk-in when she was supposed to leave. It got to the point that she finally refused to sit for her anymore. Also condsider what you are charging. While three kids is doable, you need to remember that part of what you are getting paid for is the attention you are no longer going to devote solely to your son.

I am listed with the state but I think I recall that you do not have to get listed or registerd with the state. The best way to make sure is to go to the website http://www.dfps.state.tx.us/. If they are claiming the childcare on their taxes at the end of the year you will have to claim as income. If it is just a cash payment everyweek then I would not worry about it. I would find out if the parents are going to claim it. Good luck.

You don't have to be licensed to file taxes. If you file taxes it would be good to type up something for the parents to get the childcare deduction on their taxes. They will need your social security number to do this.

If you file, you can also deduct any costs you incur while childcare. You can write off anything you use when you babysit. You may also be able to write off a portion of your electricity and phone bill.

Hope this helps.