If you're babysitting children, the Internal Revenue Service requires you to declare the money you earn as income. Whether you're a teenager earning spending money or an adult running her own babysitting service, the money you bring in belongs on your tax return. All the rules of self-employment apply, along with the thresholds for filing a tax return and any deductible expenses you may be paying.
Minimum Filing Requirements
According to IRS rules, you must declare any income earned from miscellaneous services, including an informal or occasional babysitting arrangement. There is no minimum age; tax rules on declaring income apply to minors as well as adults. The IRS does not require you to file a return, however, if your only source of income was self-employment and the amount you earned was less than $400. There's also some good news if you are still a single, dependent child. If someone else claims you as a dependent for tax purposes, you only need to file a tax return if you earn more than $6,200 in babysitting and other income combined, for tax year 2015. The IRS updates this threshold every year.
Video of the Day
Declaring Income on Schedule C
Declare babysitting income on Schedule C, the form that the self-employed use to itemize their earnings and expenses. The total amount goes on Part I, Line 1. If you had any expenses associated with the service, you claim those deductions in Part II. For example, if you had to pay bus fare to get to a home for babysitting, you have a transportation expense associated with your self-employment. That cost goes on Line 24, and is subtracted from your income amount to arrive at net income on Line 31.
Declaring Income on Form 1040
If you're showing net income on Schedule C, Line 31, it carries over to Line 12 on your Form 1040. This amount is included with any income you may have earned from a job, from unemployment compensation, from interest on a bank account, or other sources. The total income then appears on Line 22 before you make any adjustments, or claim any exemptions or tax credits. You also will have to fill out Schedule SE to figure any self-employment tax you may owe; this tax represents payments to Social Security and Medicare.
If you're babysitting as an employee and your boss issues a W-2 to declare your wages, different rules apply to your tax situation. If you're single, not claimed as a dependent and under 65, for example, the IRS only requires a return if your total wages from all sources exceeded $10,150, as of tax year 2014. This income is declared on Line 7 of your 1040. You would declare expenses as miscellaneous employee expenses on Schedule A, if you're itemizing deductions, and would not owe any self-employment tax on the income.