At home child care?

Question

Does anyone watch children at home? How do you deal with taxes? I am considering doing it after I have my son in July. Just want to get everything organized.

Answer

My husband watches kids and gets paid by the state. I just had additional withholding withheld out of my check from work.

If you cannot go that route, I would look into sending the IRS money each quarter as a prepayment. If you have too much money coming in throughout the year, IRS may penalize you for paying taxes late. Also, if you are claiming the income, you need to look into issuing 1099s to the people who you watch kids for, so the can claim that they paid you the money.
 
You should speak with your accountant or tax preparer. I worked at a CPA firm, and we would always have clients wait til after the IRS penalized them to seek out help.

Answer

Typically with a personal business you would set aside money to pay towards taxes at your expected tax rate. That way you aren't "surprised" with a large amount to pay back to the government.

At home child care?

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