Do I Need to Report Babysitting Income on My Taxes?
Learn when babysitting income needs to be reported, how classification affects taxes, and what records and deductions may apply to your situation.
Earning money from babysitting might seem informal, but tax rules still apply. Whether it’s a regular job or occasional work, the IRS requires you to report this income. Failing to do so could result in penalties or missed deductions.
Understanding when and how to report babysitting earnings ensures compliance with tax laws while potentially reducing taxable income.
Determining If Income Must Be Reported
Babysitting income is taxable, whether earned through a formal job or casual arrangements. The IRS considers any compensation for services as earned income, even if paid in cash without formal records. Babysitters must report all earnings, regardless of payment method—cash, Venmo, PayPal, or personal checks. Digital payment platforms may issue Form 1099-K if transactions exceed $600 in a year, but even without this form, the income must still be reported.
Parents hiring babysitters typically don’t issue tax forms unless they qualify as employers, so babysitters must track their own earnings. Payments covering food, transportation, or other expenses may still be taxable if they are part of total compensation. The IRS does not differentiate between structured wages and informal payments when determining taxable income.
Self-Employment vs Household Employee Classification
Babysitters must determine if they are self-employed or household employees, as this affects tax obligations and reporting requirements. The classification depends on how much control the hiring family has over the babysitter’s work.
A household employee works in a private home under the direction of the hiring family. If parents set the babysitter’s schedule, dictate specific child care tasks, and regularly pay for services, the babysitter may be classified as a household employee. If the family pays $2,700 or more in 2024, they may need to withhold Social Security and Medicare taxes and provide a Form W-2.
A self-employed babysitter operates independently, deciding when and how to work. This classification applies to those who babysit for multiple families, set their own rates, and provide their own supplies. Unlike household employees, self-employed babysitters must pay self-employment tax, which covers Social Security and Medicare. In 2024, this tax rate is 15.3% on net earnings over $400. Those expecting to owe $1,000 or more in taxes for the year may need to make estimated quarterly payments.
Basic Filing Thresholds
A babysitter’s income determines whether they need to file a federal tax return. The IRS sets annual filing thresholds based on age, filing status, and income type. In 2024, a single taxpayer under 65 must file a return if their earned income exceeds $13,850. Babysitting income counts as earned income, so those exceeding this limit must file.
Even if earnings fall below this threshold, filing a return can be beneficial. If federal income tax was withheld, filing may result in a refund. Additionally, reporting income allows babysitters to qualify for tax credits like the Earned Income Tax Credit (EITC), which provides financial relief to low- and moderate-income workers. A babysitter earning below the filing threshold but meeting EITC qualifications could receive a refund even if no taxes were owed.
Keeping Records for Babysitting Services
Accurate financial records help babysitters report income correctly and avoid IRS discrepancies. A detailed income log should include dates worked, hours, payment amounts, and the names of families who hired them. A spreadsheet or accounting software like QuickBooks Self-Employed can help track earnings throughout the year.
Babysitters should also keep copies of bank deposits, payment app transactions, and receipts for work-related expenses. If audited, documented proof of earnings and expenses supports reported figures. Payment platforms like Venmo or PayPal may not always issue tax forms, so downloading transaction histories at year-end ensures all income is accounted for.
Deductible Expenses for Babysitters
Self-employed babysitters can reduce taxable income by deducting eligible business expenses. The IRS allows deductions for ordinary and necessary expenses directly related to babysitting services.
Supplies like toys, books, and arts and crafts materials purchased for childcare can be deducted. If a babysitter provides meals or snacks for children, food costs may qualify as a business expense. Transportation expenses can also be deducted if a babysitter travels between multiple clients’ homes. The IRS sets the 2024 standard mileage rate at 67 cents per mile for business-related driving, though commuting from home to a single job location isn’t deductible.
Babysitters working from home may qualify for the home office deduction if a specific area is used exclusively for childcare. This can include a portion of rent, utilities, and internet costs. Professional development expenses, such as CPR certification courses or childcare training programs, are also deductible. Keeping receipts and mileage logs is necessary to substantiate these deductions in case of an audit.