Side Income

[Oats&Ivy]

So, on weekends I often would do housework for family members. I didn't give them receipts, which obviously I should have. I need to report this as income, but all I have is my memory telling me what they paid. If there was an audit on me (unlikely but always a possibility) how would I prove what was paid to me? Do they look at my bank account? I didn't always deposit the cash into my account though. So say one month I made 400, maybe I deposited 200. Would they ask my family members to confirm the amount that was paid to me?

I guess I'm just worried somehow something will come back to bite me in the butt for not keeping better records.

[TwinKristi]

I think this is kind of a grey area, I doubt they would be claiming this on their taxes, so it's only what you divulge that you are responsible for and like you said, you only deposited some of it so that's all you could prove in an audit. I don't know... You're supposed to keep track for this reason but maybe being under a certain amount you don't have to file? Plus it's not a legitimate legal business, right? Know what I mean? Do you have a business license in your town? Pay taxes to the city on those sales? Plus did you supply your own cleaning supplies or use theirs?

[Oats&Ivy]

Well, it's not a "legitimate" business in that I don't have an EIN specifically for the business if that's what you mean. But I did make around... 2500 over the course of the year. From what I recall, anything over 500 must be reported. And I did not provide the supplies, they did.

[Oats&Ivy]

And yes I realize I should have kept better records. But last year was a rough year for me in terms of consistent enrollment and I was struggling with everything else going on in my life. This was my family's way of helping me through it. I also was playing around with turbo tax, and it is in my benefit to claim as much of the house cleaning money as possible. Should I claim it all or just the amounts that were deposited into my account? I could also make an end of year receipt and have them sign it... would that work?

[TomCopeland]

income

Well, it's not a "legitimate" business in that I don't have an EIN specifically for the business if that's what you mean. But I did make around... 2500 over the course of the year. From what I recall, anything over 500 must be reported. And I did not provide the supplies, they did.

You must report all of the money as income. You could ask family members to see if they have records of how much they paid you. Otherwise, do you best to estimate it. The taxes on this money will be very low.

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[Oats&Ivy]

Thanks so much Tom!

Oh and so should I add this misc income on my Schedule C as "Other income" or a separate Schedule C?

[TomCopeland]

second business

Thanks so much Tom!

Oh and so should I add this misc income on my Schedule C as "Other income" or a separate Schedule C?

Since it's not related to day care work, report it on a Separate Schedule C.

[Oats&Ivy]

Since it's not related to day care work, report it on a Separate Schedule C.

Thanks, you've been a great help! I appreciate all you do for us providers here at daycare.com!