I am a part time babysitter who babysits for different clients everyday. Can i deduct mileage to and from their house since i'm not going to a permanent workplace?

Forum|Forum|7 years ago
June 1, 2019
10 replies
0 views

I am going to file a schedule C for my babysitting, and a W-2 for a barista job i had(not trying to deduct mileage for this job obviously)

TurboTax Free Edition iOS

Hal_Al

Employee

A question you didn't ask is: am I self employed?
There is an exception to income from babysitting being subject to self-employment tax.. You may have "household employee" wages. If no single employer paid your more than $1900 ($2000 2016), and you sat in their home, not yours, you may be able to avoid the self employment tax. But, you will also not get credit for these wages with the Social Security Administration, for future benefits.
In TurboTax, enter at:
Federal Taxes
Click on Wages and Income
Click on Explore on My Own
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C click the start button
On the next screen click the start button on Other Income not already reported on Form W-2 or Form 1099
Answer Yes on the next screen and enter the amount under Household Employee Wages

TurboTax will put the income on line 7 of form 1040 or 1040A with the notation "HSH". It is still considered earned income for the earned income credit. But the IRS is leery of people claiming EIC without paying social security tax.

T

TaxGuyBill

Employee

Personally, I think that working for "different clients everyday" makes her an Independent Contractor. It seems like randomly scheduled events, that she schedules and controls, rather than a regular time setup and controlled by the parents. Yes, it's a bit of a gray area, but from the very brief description she gave, that is how I think it should be classified.

Here is a couple of links from a Canadian Tax Court case that seems to have similar circumstances that was ruled as an Independent Contractor. Yes, it is using the Canadian tax system, but they use a very similar method of classifying Employees versus Independent Contractors.
<a rel="nofollow" target="_blank" href="http://www.nationalpost.com/babysitter+employee+contractor/4456447/story.html">http://www.nationalpost.com/babysitter+employee+contractor/4456447/story.html</a>
<a rel="nofollow" target="_blank" href="https://cases.legal/en/act-ca1-878357.html">https://cases.legal/en/act-ca1-878357.html</a>

A

aubrei2014Author

Employee

I work through a company that matches families with babysitters( I do not pay this company and they do not pay me, the families pay the company scheduling fees in order to book me- and i get paid direct cash by the parents at the end of every babysitting job). I do come back to the same homes often(not making anywhere near $2000 from one family), but usually there will be one random family a week that I only babysit for once or twice. Does this still classify me as an independent contractor?

T

TaxGuyBill

Employee

Personally, I think that strengthens the case that you are an Independent Contractor. The parents are essentially 'shopping' for a babysitter each time they need help.

A

aubrei2014Author

Employee

okay! So that means I would file a schedule C?

Hal_Al

Employee

Your choice:
If you want social security credit, file schedule C (or C-EZ).
If you would avoid the self employment (FICA) tax, file as a household employee.

There is some risk of an IRS audit if you choose Household employee. It is not unusual to have two tax experts* give you different opinions on how a tax issue should be handled.

*TaxGuyBill is more experienced than I am.

A

aubrei2014Author

Employee

Does the amount I made make me more or less susceptible to being audited? I have about $5,000 worth of income that I have a W-2 for, and then only around $2,500 in additional income through this babysitting. I would obviously like to avoid the self employement tax but wanna make sure I'm not breaking any rules.

T

TaxGuyBill

Employee

There is VERY little chance of be audited.

It is definitely a "gray area".  Personally, I think you are an Independent Contractor, but you could easily make an arguement that you are a Household Employee.

Another thing to consider:  An an Independent Contractor, you will be able to deduct any business expenses that you have (including mileage, *IF* you qualify for it), which will reduce your 'profit' and therefore reduce your taxes.  As a Household Employee, you won't benefit from any business deductions.

Again, you can probably make an argument either way, so think about, decide, then don't worry about your decision.   🙂

Hal_Al

Employee

Simple answer: no. Getting to work, even for the self employed, is commuting and commuting is not deductible.

But if you go to 2 or more work sites (including your regular W-2 job) in a single day then the 2nd trip is deductible. For example you leave home drive 5 miles to the barista job then drive 10 miles to the a baby sitting job. At the end of the day you drive 15 miles home. Only the 10 miles between jobs is deductible. The first trip in the morning, from home and the last trip at night back home are considered commuting and are not deductible.

T

TaxGuyBill

Employee

Maybe.

If your house qualifies as your "Principal Place of Business", the mileage would be deductible. If it doesn't qualify as your "Principal Place of Business", the mileage is not deductible.

Here is the sentence from the Law for what is a Principal Place of Business:

"the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business".

Publication 587 also discusses it a bit more:

https://www.irs.gov/publications/p587/ar02.html#en_US_2015_publink1000226302