I'm going to be taking care of my friends baby. I will be paid by a government assistance program for child care and I would have to pay my own taxes from my pay. How do I calculate how much I have to pay and If I have to pay?:confused:

You will owe self-employment tax at 15.3% on the income earned providing this child care.

How much you owe in income taxes depends on the state in which you reside and your total income from all sources.

This is self employment income, which is also treated as earned income for Earned Income Credit and Child Tax Credit. Also you must file tax return if self employment income (after deducting expenses) is $400 or more.

You also might want to look into paying the self employment tax before the end of the year, so that no penalty is added for late payment.

I am going to repost my answer to a similar question from last week

There are many, many deductions that you may use to reduce your taxable income. The biggest one is the percentage usage of your home as a day care. I would recommend going to a qualified tax preparer for your first year of filing a tax return as a day care provider. Make sure that they have experience with preparing a day care provider schedule C as there are a lot of deductions that an inexperienced preparer may overlook

As noted, you have to pay the self employment tax ( which is basically your social security, that is 15 percent, then you will have your federal income tax at what ever level you pay, 20 or so percent is a gues, then you have to pay your state income tax, if your state has one.
So between 30 to 40 percent is paid in taxes normally.

Do not let the tax percentages keep you from doing this work.

If this is your ONLY source of income, it is possible that you may get a refund even though you made NOT tax payments due to the Earned Income Credit.

The government agency should provide you with a 1099 form or similar document. This is similar to a W-2 and states how much they paid you. You will need to declare this amount along with all of your other income. The amount of tax you eventually need to pay is determined by all of the usual factors ; how much you earn, how many dependents you claim, whatever deductions you're entitled to and how much tax was withheld by your employer(s), if any, throughout the year.

LuvBNMommy:

Send me an email with your phone number and we can discuss this in detail.