I'm currently sending DS to an unlicensed daycare (she just watches a few kids and we knew her through my parents). Yesterday at pick-up she said she just wanted to remind me that since she's not licensed I can't claim daycare on my taxes. Is that how it typically works for unlicensed daycares?
I'm wondering if she is just telling me that because she is not claiming all the income I have paid her for daycare this past year.
pomelo / 5298 posts
I don't believe that licensing would prevent her (and you) from reporting the item on taxes. But, likely she's charging you a lower rate knowing she's not going to report the income and therefore expect you not to report the expense. I think this arrangement is fairly common with in home providers.
honeydew / 7303 posts
Exactly what @MamaG said. To be able to claim it on your taxes she would have to give you her ssn. She is probably not planning on reporting the income, therefore she won't provide that info to you.
grapefruit / 4545 posts
@renee0106: I agree with @MamaG: . The licensing does not impact this...its merely the fact that she is not reporting the income - therefore you cannot report the expense.
However, I suspect if she were to attempt to file with authorities as a daycare and get a tax id code she may have to get licensed as she is providing a lincenseable service?
Bottom line...its the same as a babysitter...shes not claiming it therefore you cant claim the expense either...
squash / 13208 posts
"For tax purposes, your in-home daycare is considered a business whether you or not you are registered or licensed. "
so yeah, she is only saying that because she isn't reporting the income which means you cant either
cherry / 197 posts
@MamaG: @yellowbird: @Mrs D: @Mamaof2: Thanks for the information!
I guess I should have asked about this before we started daycare with her. She's not any cheaper than other in home daycares in our area, so this actually makes her quite a bit more expensive because of the tax implications.
And I thought I had asked all the right questions before choosing her. We are switching daycares in April anyways because she is pregnant and the new daycare is licensed so at least I'll be able to claim some of my expense for this year.
cantaloupe / 6017 posts
@renee0106: what she's doing is illegal (assuming you paid her more than the minimum required for reporting federal income) so if you want to address it with her you can. Might not go over so well, but she shouldn't be earning income under the table and avoiding taxes like that.
pomelo / 5660 posts
Agree with @Silva. What she is doing is illegal if she is not reporting her income and that's why she won't provide you her SSN.
persimmon / 1467 posts
She doesn't have to be registered and have a tax ID to work for you, or to be legal (and be reporting her income). However, if she doesn't have a tax ID, you'd need her SSN to claim it on YOUR taxes, regardless of what she's doing. I wouldn't assume right away that she's being illegal. But you could ask her about it. My babysitter (not a ton of hours) is a friend, so I don't really want to ask her for her SSN or deal with paying for her SS taxes (as my nanny/employee) or any of that stuff, so I just don't claim it. I realize if she watched DS more and it was a bigger expense it would definitely impact my taxes more and then I might not ignore it.
grapefruit / 4321 posts
What she's doing is absolutely illegal. And, she blatantly lied to your face. The reason you can't claim the expense is because she isn't claiming the income, not because she's unlicensed. This would be a huge red flag to me.
cherry / 197 posts
@Truth Bombs: Yeah I am definitely not happy about this, so I'm going to talk to her about it today. Definitely a red flag. We're switching daycares in April so it's won't make too much of a difference for us, but I'm still upset about it.
Even though what she's doing is wrong, she does take very good care of my DS so I'm just going to have to focus on that for the time being.
cherry / 245 posts
@renee0106: I'm just curious about what she said when you talked to her! I hope it went okay.
cherry / 197 posts
@MRSJX3: Omg, it did not go well. She then told me that she's going to be done doing daycare at the end of the month. So now I'm scrambling to find a new place.
pomegranate / 3973 posts
@renee0106: Wow that sucks! I have to msg my old daycare provider about taxes and nervous about what she will say. Thank goodness my current daycare (also not licensed) is on top of it and provided her ssn with total for the year.
| Today | Monthly Record | |
|---|---|---|
| Topics | 1 | 0 |
| Posts | 0 | 1 |
Ask for Help
Make a Suggestion
Frequently Asked Questions
Bee Levels
Acronyms
Most Viewed Posts
Hellobee Gold
Hellobee Recipes
Hellobee Features
Hellobee Contests
Baby-led Weaning
Bento Boxes
Breastfeeding
Newborn Essentials
Parties
Postpartum Care Essentials
Sensory Play Activities
Sleep Training
Starting Solids Gear
Transitioning to Toddler Bed
All Series
Who We Are
About the Bloggers
About the Hostesses
Contributing Bloggers
Apply to Blog
Apply to Hostess
Submit a Guest Blog
Hellobee Buttons
How We Make Money
Community Policies
- Google Plus
- Stumbleupon
- Twitter
- Facebook
- Pinterest
- Favorite0
14 comments