Taxes cash job am I wrong

So my husband and I are lower middle class. Have no debt besides our home we own 20% of. We own our vehicles. We pay our own insurance.

I'm a stay at home mom of 2 toddlers and was going to take another toddler in as childcare part time. I was getting paid by the day 40 dollars a day.

My mom basically told me I'm wrong for taking cash and I should have made a LLC so I should be paying taxes on it.

Anything over $400 in income as a buisness has to be claimed on taxes. However I am not running a small buisness and not doing this full time or for more then one child. I feel as though we pay a lot in taxes and are not recipients of any government programs so I don't feel like I am running a scam. Am I wrong?

**I cannot charge more it is the going rate in our area. No one would be able to afford more. Most charge 30 per a kid per a day and provide food. I'm not providing food so 40 is above the norm for my demographic.