babysitter and taxes

[churnbabychurn]

avremie and avrumy is getting confusing.

[avrumy]

avremie and avrumy is getting confusing.

get used to it. In accounting u have to be detail orintated. Every number and letter makes a dif.

[dealfinder85]

she isnt jewish

[churnbabychurn]

she isnt jewish

lol

[Tzadik Nistar]

She reports it as a one time income and not as monthly income, so its not a problem with medicade as they only look on steady income

[myb821]

really? Please explain?

American opportunity credit for students

Q4. How much is the American opportunity tax credit worth?
A. It is a tax credit of up to $2,500 of the cost of tuition, fees and course materials paid during the taxable year. Also, 40% of the credit (up to $1,000) is refundable. This means you can get it even if you owe no tax.

[avrumy]

American opportunity credit for students

I see where ur mistake is. Thats only if you have income BUT if your income is ZERO you can not get back anything Even refundable credits. (I just tried it in my software to confirm it.)

[MarkS]

To clarify:
Say you are single with no kids and make up to $10,000.
You tax liability will be zero due to the $3,900 personal exemption and the $6,100 standard deduction.
Since you had income though you are eligible for refundable credits.

Say you are married with a kid and make up to $23,900.
You tax liability will be zero due to the $3,900 (X3) personal exemption and the $12,200 standard deduction.
Since you had income though you are eligible for refundable credits.

If you did not work and didn't earn any income you

[churnbabychurn]

So is the AOTC refundable or not? Lets clear this up!

You do not qualify for a refundable American opportunity
credit if 1 (a, b, or c), 2, and 3 below apply to you.

1. You were:
a. Under age 18 at the end of 2013, or
b. Age 18 at the end of 2013 and your earned income
(defined later) was less than one-half of your support
(defined later), or
c. Over age 18 and under age 24 at the end of 2013 and a
full-time student (defined later) and your earned income
(defined later) was less than one-half of your support
(defined later).
2. At least one of your parents was alive at the end of 2013.
3. You are not filing a joint return for 2013.
If you meet these conditions, check the box next to line 7,
skip line 8, and enter the amount from line 7 on line 9. If these
conditions do not apply to you, complete line 8.
You can answer the following questions to determine whether
you qualify for a refundable American opportunity credit.
1. Were you under 24 at the end of 2013?
 If no, stop here; you do qualify to claim part of the allowable
American opportunity credit as a refundable credit.
 If yes, go to question 2.
2. Were you over 18 at the end of 2013?
 If yes, go to question 3.
 If no, go to question 4.
3. Were you a full-time student (defined later) for 2013?
 If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
 If yes, go to question 5.
4. Were you 18 at the end of 2013?
 If yes, go to question 5.
 If no, go to question 6.
5. Was your earned income (defined later) less
 than one-half of your support (defined later) for 2013?
 If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
 If yes, go to question 6.
6. Were either of your parents alive at the end of 2013?
 If no, stop here; you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
 If yes, go to question 7.
7. Are you filing a joint return for 2013?
 If no, you do not qualify to claim part of your allowable
American opportunity credit as a refundable credit.
 If yes, you do qualify to claim part of your allowable
American opportunity credit as a refundable credit.
Earned income. Earned income includes wages, salaries,
professional fees, and other payments received for personal
services actually performed. Earned income includes the part of
any scholarship or fellowship that represents payment for
teaching, research, or other services performed by the student
that are required as a condition for receiving the scholarship or
fellowship. Earned income does not include that part of the
compensation for personal services rendered to a corporation
which represents a distribution of earnings or profits rather than
a reasonable allowance as compensation for the personal
services actually rendered.
If you are a sole proprietor or a partner in a trade or business
in which both personal services and capital are material
income-producing factors, earned income also includes a
reasonable allowance for compensation for personal services,
but not more than 30% of your share of the net profits from that
trade or business (after subtracting the deduction for one-half of
self-employment tax). However, if capital is not an
income-producing factor and your personal services produced
the business income, the 30% limit does not apply.
Support. Your support includes food, shelter, clothing, medical
and dental care, education and the like. Generally, the amount of
an item of support will be the amount of expenses incurred by
the one furnishing such item. If the item of support is in the form
of property or lodging, measure the amount of such item of
support by its fair market value. To figure your support, count
support provided by you, your parents, and others. However, a
scholarship received by you is not considered support if you
were a full-time student (defined below) for 2012.
Full-time student. Solely for purposes of determining whether
a scholarship is considered support, you were a full-time student
for 2013 if during any part of any 5 calendar months during the
year you were enrolled as a full-time student at an eligible
educational institution (defined earlier), or took a full-time,
on-farm training course given by such an institution or by a state,
county, or local government agency.

[avrumy]

To clarify:
Say you are single with no kids and make up to $10,000.
You tax liability will be zero due to the $3,900 personal exemption and the $6,100 standard deduction.
Since you had income though you are eligible for refundable credits.

Say you are married with a kid and make up to $23,900.
You tax liability will be zero due to the $3,900 (X3) personal exemption and the $12,200 standard deduction.
Since you had income though you are eligible for refundable credits.

If you did not work and didn't earn any income you

Correct!!  and just to finish your last sentence- if you do not have ANY income then you can not get any refundable credit as was the original question.

[Bostener]

 Fyi this yr the Irs has published they will require proof for all self employment which will lead to claiming the Earned income credit in certain zip codes

Which IRS publication are you talking about?

[avrumy]

Which IRS publication are you talking about?

they sent letters to the zip codes with a very high claim of the earned income credit.

[nis965]

they sent letters to the zip codes with a very high claim of the earned income credit.

In 2011 while living in Lkwd I reported money I made running a day camp. They made me provide proof that the camp existed. I needed to send them the attendance list as well us some marketing materials that I had.

[avrumy]

In 2011 while living in Lkwd I reported money I made running a day camp. They made me provide proof that the camp existed. I needed to send them the attendance list as well us some marketing materials that I had.

bingo- u got the zip code I am talking about. Was that the state u r refering to or federal? In2011 nj did not release eanef income credit in self employment until proof was shown that the money was really earned This time its federal

[nis965]

State

[avrumy]

State

that's what I figured. This year is federal.

[MeToo]

I'm guessing someone else in her family has income that's reported (but low enough to still get Medicaid, and EIC).  My babysitter asked me for a letter of employment for Medicaid, so you've got to be making something, or supported somehow, to be getting Medicaid. What you're giving her in cash, probably goes straight into her pocket. 

Separate question for the tax experts:  Is filing a 1099-MISC, that one get's from a company or individual, the same as self-employment? Does there need to proof of the jobs done, besides the 1099?

[avrumy]

I'm guessing someone else in her family has income that's reported (but low enough to still get Medicaid, and EIC).  My babysitter asked me for a letter of employment for Medicaid, so you've got to be making something, or supported somehow, to be getting Medicaid. What you're giving her in cash, probably goes straight into her pocket. 

Separate question for the tax experts:  Is filing a 1099-MISC, that one get's from a company or individual, the same as self-employment? Does there need to proof of the jobs done, besides the 1099?

yes its the same as self employment

[meshugener]

I don't know where she lives, but if its NY she's just BS'ing, because Medicaid does NOT look into and does not care what's in your bank account.
(Unless you or anyone in your household is 65 years old or older, certified blind or disabled.)