If I Babysit, Do I Have to Pay Taxes?
Wondering if your casual income is taxable? Gain clarity on tax obligations, effective record-keeping, and accurate reporting for earnings.
When you earn income, even from seemingly casual activities like babysitting, it can be subject to tax rules. The Internal Revenue Service (IRS) generally considers all income taxable unless specifically excluded by law. This means that funds received for babysitting, whether in cash, check, or digital payment, are considered gross income.
Understanding Your Tax Obligation
Babysitters are classified as independent contractors or self-employed individuals by the IRS, not employees. This means families hiring a babysitter do not withhold taxes from payments. As a self-employed individual, you are responsible for reporting your income and paying your own taxes.
The IRS requires you to file a tax return if your net earnings from self-employment reach $400 or more. Net earnings from self-employment are calculated by subtracting your allowable business expenses from your gross income.
This threshold applies to your net income, not your total earnings. For instance, if you earn $500 in gross income but have $150 in legitimate business expenses, your net earnings would be $350, which falls below the $400 threshold for self-employment tax.
Keeping Accurate Records
Maintaining accurate records of all income and expenses throughout the year is important for proper tax reporting and claiming eligible deductions. You can track this information using a simple spreadsheet, a dedicated mobile application, or a physical ledger.
For every babysitting job, record the date, amount received, and client’s name. Keep records of all business-related expenditures, retaining receipts. Deductible expenses for babysitters include transportation costs, such as mileage for driving to and from clients’ homes or activity locations, and supplies used during babysitting like toys, books, or art materials.
Deductions might include fees for first-aid or CPR certification, background check fees, advertising costs for your services, or a portion of your cell phone and internet expenses if used for business. If you use a part of your home exclusively and regularly for your babysitting business, you may also deduct a portion of your home expenses. Accurate record-keeping allows you to calculate your net profit correctly, which is essential for determining your tax obligations.
Calculating and Reporting Your Income
Once you have tracked your income and expenses, the next step involves calculating your net profit and reporting it to the IRS. For self-employed individuals like babysitters, this involves filing Schedule C, Profit or Loss from Business, with your Form 1040. Schedule C is used to report your gross receipts from babysitting and list your deductible business expenses.
On Schedule C, you will enter your total gross income from babysitting services. Then, you will itemize and subtract your ordinary and necessary business expenses, such as those for supplies, transportation, or training. The difference between your gross income and your total expenses is your net profit or loss, which is then carried over to your Form 1040. There is no minimum income threshold for filing Schedule C; all self-employment income must be reported, regardless of the amount.
Self-employed individuals need to pay estimated taxes throughout the year to cover their income tax and self-employment tax liabilities, rather than waiting until the annual tax deadline. These payments are made quarterly using Form 1040-ES, Estimated Tax for Individuals. You are required to pay estimated taxes if you expect to owe at least $1,000 in tax for the year after accounting for any withholding and refundable credits. The quarterly due dates for calendar year taxpayers are April 15, June 15, September 15, and January 15 of the following year, or the next business day if a date falls on a weekend or holiday. You can make these payments electronically through the IRS website or by mail with payment vouchers from Form 1040-ES.
Navigating Self-Employment Taxes
Beyond regular income tax, self-employed individuals are also responsible for self-employment tax. This tax funds Social Security and Medicare, which are typically withheld from an employee’s paycheck by their employer. Since babysitters are generally considered self-employed, they must pay both the employer and employee portions of these taxes.
The self-employment tax rate is 15.3% of your net earnings from self-employment. This rate is comprised of 12.4% for Social Security and 2.9% for Medicare. For 2025, the Social Security portion applies to net earnings up to $176,100, while the Medicare portion applies to all net earnings without a cap.
To calculate this tax, you first determine your net earnings from self-employment, which is 92.35% of your net profit from Schedule C. This calculated amount is then multiplied by the 15.3% self-employment tax rate. This calculation is performed on Schedule SE (Form 1040), Self-Employment Tax. The total self-employment tax calculated on Schedule SE is then reported on your Form 1040, and you can deduct one-half of your self-employment tax when calculating your adjusted gross income, which can reduce your overall income tax liability.