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AFAJ Brew Guy

AFAJ Brew Guy

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F-ing, most utterly PO'd that I have been in a long time. SO I am sitting here, going through my taxes and get the part about reporti8ng what we paid in child care. Since we moved last your we had two providers. The first who had a children since they were born is always good about providing us with her SSN and a statement showing what we paid her. The new lady, not so much.

So since the SWMBO is closer to her I have her call and ask her for her SSN. Well it turn out that the money that we paid her, she didn't report it on her taxes. The response, "Well were a little hard up this year, so we fudged our taxes anyway, I didn't report what you guys paid me."

Excuse me, you didn't report it? So I guess there is no way we are getting that SSN huh? Yeah didn't think so.

So after I recalculate that on the taxes and take that out, it drops our refund by $500, yep you read that right $500. This stupid BI**CH, f-ing C, just cost me $500, because they are a "little hard up."

And the SWMBO's response, "Well I didnt want to push the matter. We will just have to be more careful and find out about this next time." Apparently $500 isn't as important to her as it is to me.

Oh my god I just want to scream and yell and, and, and.....

Sorry for the rant. I just needed to get it off of my chest before I exploded.
 
Wait, does the IRS match that stuff up? I wasn't aware that they did that. **** it, I'd be inclined to report it anyway, if they catch it, YOU'VE got cancelled checks to her. You can prove that it's a legitimate expense that you paid (you write her checks, don't you?). It shouldn't be your problem if she's not reporting HER taxes.

EDIT: I missed where you didn't get her SS. I'd tell her that you're going to start looking for a new place immediately; in effect, your cost of childcare just went up by whatever your marginal tax rate is.
 
I think the maximum credit you get is $600.00 anyway. We paid close to $5000.00 in daycare for 1 kid and we get $600.00.
 
If you paid someone to care for a child under age 13 or a qualifying spouse or dependent so you could work or look for work, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. To qualify, your spouse, children age 13 or older, and other dependents must be physically or mentally incapable of self-care.

The credit is a percentage of the amount of work-related child and dependent care expenses you paid to a care provider. The credit can be up to 35 percent of your qualifying expenses, depending upon your income.

For 2007, you may use up to $3,000 of the expenses paid in a year for one qualifying individual, or $6,000 for two or more qualifying individuals. These dollar limits must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.
Click to expand...

http://www.irs.gov/newsroom/article/0,,id=106189,00.htmlhttp://www.irs.gov/newsroom/article/0,,id=106189,00.html
 
Check form W10 and form 2441; you can still take the deduction (I would); check the information about providers not supplying you with the information -- though I'd want to have copies of canceled checks or some such as backup.

I might not mention it to the provider until I had other child care lined up.

Rick
 
Sounds like getting the SSN information when first hiring the person is the way to go. I'll be looking at this expense in coming years, so this is good to know.
 
What do the IRS and Pelicans have in common?





V
V
V




They can both shove their bills up their ar3e!

seriously though, I would report her. Why should you pay extra. Or get her to work for free to make it up to you.
 
I'd deduct it and tell them she would not cooperate and provide you with her SSN.

If she fails to give you her SSN then tell her what you plan to do..of course I'd be looking for a new sitter really, really soon...:eek:

Just because she wants to lie doesn't mean you have to. ;)
 
Thanks for all of the advice and having the same thought on the matter as myself. Over the time that has passed since I have fist posted I have gone through and done some tax law research. Let me tell you it was a good thing I had some homebrew with me :)

Anyway I found out that I can still report it without her SSN. The IRS just says I have to have gone through "due diligence" to obtain it. I would say that I have seeing as how I pretty much told her that she either give me the SSN or else. Turns out she went with the or else. As of an hour ago she will no longer be providing care for my children.

I figure hey you know what, there is no need for me to be giving you my hard earned money if this is they way that it is going to be. Oh well, sucks to be her. I guess she really will be "hard up" now without me paying her.

Once again thanks to all! I appreciate you listening to me vent :)
 
Far be it from me to take the moral high ground... and now that you have made this decision, I feel free to say this...

Would you really want someone who freely admits to defrauding the US government out of tax dollars to look after your kids?

I won't pretend that every single thing I do, or have done is 100% legit, but cheating on your taxes shows bad moral fibre, and I wouldn't want my kids (I don't have any... but if I did...) spending time with people who not only cheat on their taxes, but freely admit it.
 
Oh I completely agree with you. That was one of the arguments that I used with the SWMBO when I told her that we needed to find new child care. Let me tell you that was a whole new fight in and of itself.

I am with you though, I work in IT at a university. I am always doing side jobs for people at their homes if they ask me. While I do not report all of it, I do report anything that I make over a certain dollar amount. This year I reported a fair amount of money. I know I dont have to, but I feel an obligation to do so.

I am just glad that we didn't have to be with her all of last year. Seeing as how we get 20% of our child care costs back, that would have been one hell of a chuck of change that I may have had to argue with the IRS about.
 
Anyway I found out that I can still report it without her SSN
Click to expand...

I knew that was the case. The IRS is going to be on her big time too. Shes gonna feel like a real ******* when shes out your money and the IRS audits her ass
 
Perfect example of "penny wise, pound foolish." She tries to save a little bit of money by cheating the government, and loses a whole helluva lot more by losing your family as clients.

I wouldn't leave my daughter with anyone whom I thought was cutting corners, or who wasn't operating in what I thought was a professional manner.
 
it maybe a little late but you might be able to talk to some of the other parents if you know any of them. she obviously had to report some of them on her taxes so they might be able to give you the SSN.
 
PeteOz77 said:
I won't pretend that every single thing I do, or have done is 100% legit, but cheating on your taxes shows bad moral fibre, and I wouldn't want my kids (I don't have any... but if I did...) spending time with people who not only cheat on their taxes, but freely admit it.
Click to expand...

I would much rather leave my children with people who have the decency to keep their crimes to themselves;)

Joking aside - is this a full on day-care or something more casual? When we filed my daughters daycare we just needed name, address... Is the SSN requirement new? (My daughter has not been in daycare since shes started school... almost 4 years ago.)
 
daycares that are legit all have a taxs id number that you record on teh form. if you are using an individual, they are supposed to provide you with a ss number.

as for defrauding the gob'ment... when they can show me they can resposibly spend my dollars, then i'll worry about morale fibre etc... ;)
 
Ask for the SSN, anyhow. If she refuses, maybe you can still send her a 1099 and note that she refused to provide a SSN. That way, you still have some sort of paper to cover you. I am just speculating, though, as I don't deal with tax stuff at all.


TL
 
If she lied on her taxes how many times has she lied to you? Next person, a copy of their drivers license and SS card would be a job requirement. Any legit person won't have a problem with it.
 
Wait a minute, please.

Just because someone doesn't report all money on their tax return (cheating the govt.) doesn't have anything to do with how he/she would act in a situation involving individuals, children.

If she wasn't willing to amend her return and include the income, then she had another option. What she should have done was offer to pay the OP the $500 of additional tax refund that he lost. I'm sure he would be okay with that as well.

But, since she didn't offer to do that, then him taking the deduction regardless is certainly acceptable.
 
I'd still send her a 1099-misc and make sure the IRS gets their copy. Period.

When I handled my band's money, it only took a few sound companies pulling the same crap before I demanded a tax ID before they got paid. The other guys still got their 1099s and I was contacted twice by the IRS looking for people evading taxes.
 
Here in AUS, it is required by law that any time you pay someone for good and services, they must have supplied an ABN (Australian Business Number) If you DO pay them and they have not supplied an ABN, you have to withhold the maximum rate of tax from the final payment, and send it to the tax dept. That's 48% here....
 
desiderata said:
Wait a minute, please.

Just because someone doesn't report all money on their tax return (cheating the govt.) doesn't have anything to do with how he/she would act in a situation involving individuals, children. .
Click to expand...

Sure does, it goes to her intregrity and honesty, both of which are now questionable. Feel free to hire liar and cheater. I won't.
 
EdWort said:
Sure does, it goes to her intregrity and honesty, both of which are now questionable. Feel free to hire liar and cheater. I won't.
Click to expand...

so which liar and cheat are you voting for this november? ;)
 
desiderata said:
Wait a minute, please.

Just because someone doesn't report all money on their tax return (cheating the govt.) doesn't have anything to do with how he/she would act in a situation involving individuals, children.

If she wasn't willing to amend her return and include the income, then she had another option. What she should have done was offer to pay the OP the $500 of additional tax refund that he lost. I'm sure he would be okay with that as well.

But, since she didn't offer to do that, then him taking the deduction regardless is certainly acceptable.
Click to expand...

Being the OP :) I do agree with you. I did have that conversation with her yesterday. I figured now that I have calmed down a little bit I would be a bit more level headed and be able to have real conversation with her. I asked her once again for the SSN and again she denied me. I also asked her to pay me the money back that she was costing me. I explained that if she did not the IRS would be all of her and it may end up costing her more. She still said no. I then told her that I had no choice and I was going to report it on my taxes, she told me, well you do what you have to do.

She is pretty much in a catch 22 here. She will most likely get audited either way, with or with out her SSN. She gives me the SSN and the IRS will see the difference in what she reported and what she earned. She doesn't give it to me and the IRS investigates. This is what I don't understand, she has one way out where she doesn't get screwed, paying me, and she wont take it. Oh well....

In other news our new sitter, a little more expensive, but she has an IRS ID, which I already have a copy of, I will not be going through this again.
 
Update!

Whoo hoo! I was just going over the finances and doing the checking account reconcile and found that the last check that we wrote her has not cleared the bank yet! Whoo hoo stop payment on that bad boy!

On the flip side, I did write a new check for the difference of what she owed me and what we owed her. I know I really didn't have to, but damn it all I cant be that heartless.
 
did she know you were turning the expenses in on your taxes at the begining of the business realationshiop?

when my little girl was young, we payed a family friend of ours a few hundred a month to watch mary inbetween our work shifts. wife works nights, and i cover sunrise plus 11 hours. when i went to do the taxes, and realized i needed the ss #, i just wrote off the child care from her, cause there was never a understanding of it being a contract.
 
uglygoat, yes she did know because it was one of the things that we discussed. The understanding was that she would provide us a printout with what we had paid her at the end of the year along with her SSN. We had no reason to doubt this as this is how our old daycare did it, and we never had a problem. When you mentioned contract, I went back and looked at our original contract with her and this is also stipulated in it.

While we are in the wrong by not demanding the SSN up front, she still should have honored the agreement.
 
AFAJ Brew Guy said:
Update!

Whoo hoo! I was just going over the finances and doing the checking account reconcile and found that the last check that we wrote her has not cleared the bank yet! Whoo hoo stop payment on that bad boy!

On the flip side, I did write a new check for the difference of what she owed me and what we owed her. I know I really didn't have to, but damn it all I cant be that heartless.
Click to expand...

But if she provided the service you paid for, shouldn't she get the money? You're still going to claim it and get your deduction aren't you? If so then you aren't out anything and you're clawing back money that was paid for services rendered. If she doesn't pay taxes on her income, that's between her and the IRS.
 
fingers you are right. In fact it took a good swift kick in the ass by the SWMBO to bring me back to reality. I have just been so freaking pissed off about this whole thing that I acted out of emotion instead of logic earlier today. The new check that was written was for the full amount. The SWMBO took it to her and let her know that we were reporting it on the taxes.

I guess from what the SWMBO said, the ex-sitter practically got down on her knees and begged her not to as she does not want to deal with the IRS.

So yes in short I was wrong earlier today and I should have taken a little more time to think about what I was doing.

Anyway it no longer matters as the tax forms have been signed and sealed. I guess we will see what happens.
 
You did the right thing, on all counts. You honor your part of the bargain, as you did receive the services. You should report the expense on your taxes, too, as there is no reason you should both collude in her attempt to evade taxes and then feel a wallet hit on top of it.


TL
 
mrk305 said:
I think the maximum credit you get is $600.00 anyway. We paid close to $5000.00 in daycare for 1 kid and we get $600.00.
Click to expand...

The max credit (i.e. it is pre-tax expense) you can get for daycare expenses is $5,000 per year. Doesn't matter how many children are involved, it's capped at $5,000.

uglygoat said:
did she know you were turning the expenses in on your taxes at the begining of the business realationshiop?

when my little girl was young, we payed a family friend of ours a few hundred a month to watch mary inbetween our work shifts. wife works nights, and i cover sunrise plus 11 hours. when i went to do the taxes, and realized i needed the ss #, i just wrote off the child care from her, cause there was never a understanding of it being a contract.
Click to expand...

I really don't think that contract law comes into play with this because her reporting her income is federal law ... no contract can nullify or circumvent federal or state laws. It's his right to claim those deductions as well too.
 
AFAJ Brew Guy said:
I guess from what the SWMBO said, the ex-sitter practically got down on her knees and begged her not to as she does not want to deal with the IRS.
Click to expand...
I'm not sure what her big problem is. If she is as hard up as you describe then her tax rate should be pretty low. And she should realize she can write off a number of expenses related to baby sitting. It may be a pain but it should save her some money. I would expect that she will pay a lot fewer taxes on that income than you would have if she works the numbers right.

Craig
 
srm775 said:
The max credit (i.e. it is pre-tax expense) you can get for daycare expenses is $5,000 per year. Doesn't matter how many children are involved, it's capped at $5,000.
Click to expand...

Where are you getting your information from?

http://www.bankrate.com/brm/itax/tips/20010228a.asp

This matches up perfectly with what I pulled earlier directly from the IRS. It's a credit, but it's not a dollar-for-dollar credit. The credit is 35% of the expenses, and you can claim up to $3,000 of expenses for one child ($6,000 for two or more).

I'm guessing that it's structured as a "credit" rather than as a deduction so that it can help people who don't itemize (who are mostly going to be low- to middle-income).

FULL DISCLOSURE: I ain't a tax guy, but I work closely with lots of 'em and I've been utilizing this credit myself for a couple years.
 
MikeFlynn74 said:
Which is insane as Child care in Alaska can be close to 900 a month.
Click to expand...
I don't think that is unreasonable in many areas. Even in Cleveland good day care is nearly that price. Ofcourse my sister in rural NC pays about half that.

Craig
 

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