I watch a friends kids for her on a regular basis and she pays me monthly. She just informed me that she is going to claim me on her taxes as her childcare. Do I have to file taxes now because of this? I am a stay at home mom and have been for over 4 years so I haven't had to file in that long. I don't know if I have made enough to have to file though. But if I have and she claims me if I haven't filed will I get in trouble and will they take money from my husbands tax return? I'm so confused and don't know where to go for help!

Starting this year (2009), you need to file Schedules C and SE, claiming the income earned on the Schedule C, and deducting allowable expenses such as Business Use of the Home, plus the costs of feeding and entertaining your friend's children while they are under your care.

Since it is apparent that your friend did not claim the Child Care Credit on her return, I would not worry about amending your past years' tax returns to claim the income earned prior to 2009.

It WOULD be helpful if you stated what your monthly incomeis from this venture. If you want privacy, email me at [email protected], or send me a Private Message.