any tax pro's in here

[Robertsj22]

id like to claim child care tax credits for my two kids. however we pay family members cash for these times and don't want to list there names so they don't get jammed up. any way around this?

 

[Straight Arrow]

Not a tax pro, but life lesson learned is, "If you pay under the table ... then stay under the table!"

'Nother bit of advice ... don't hang your laundry out in the public forum for all to see ... or you open yourself to getting "jammed up".

 

[npaden]

I know they require social security numbers and I would imagine they at least attempt to match that up to reported income on the other side.

I'm sure your family members are reporting all of their income....

 

[Deleted member 40728]

 

[TexAg09]

I'm sure BigFin is thinking "What, am I a joke to you?" LOL

 

[westbranch]

Pretty clear:

Topic no. 602, Child and Dependent Care Credit | Internal Revenue Service

Topic No. 602 Child and Dependent Care Credit

www.irs.gov

Care Providers​

You must identify all persons or organizations that provide care for your child or dependent. You must report the name, address, and TIN (either the social security number or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address of the organization on your return. You can use Form W-10, Dependent Care Provider's Identification and Certification to request this information from the care provider. If you can't provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information. If you pay a provider to care for your dependent or spouse in your home, you may be a household employer. If you're a household employer, you may have to withhold and pay social security and Medicare taxes and pay federal unemployment tax. For more information, refer to Do You Have Household Employees? in Publication 503, Publication 926, Household Employer's Tax Guide, or Topic No. 756.

 

[Stocker]

 

[Pucky Freak]

On a serious note, there is tax evasion and tax avoidance. Tax avoidance is maximizing your deductions and credits to pay as little taxes as possible LEGALLY. Example: my wife and I paid $0 in federal tax this year, and $4k in state taxes. Tax evasion is any illegal action to reduce your tax bill such as fudging numbers, claiming things you don't have documentation for, not recording taxable income, etc. I encourage you to abide by all tax laws to the letter, and focus your attention on tax avoidance - there are plentiful ways to legally reduce your tax bill. I started doing my own taxes at age 15, picked up a thing or two over the years.

 

[Stocker]

 

[mountainlaurel3]

No, there is not a way around it. Either you report their ssns, get the credit and they report the income, or no credit for you.

 

[longbow51]

Don't mean to be snide, but if you can afford to pay family members, you can afford to pay an accountant. Our guy of 30+ years has kept us from many bad financial decisions. We are also clean if we get audited even though our investments are diverse.

 

[gouch]

You would think I would be an expert on taxes, as long as I have been paying them but I'm not. I do know, for reasons I won't go into, that if you pay for day care under the table you can not us it on your taxes.

 

[TexanSam]

On a serious note, there is tax evasion and tax avoidance. Tax avoidance is maximizing your deductions and credits to pay as little taxes as possible LEGALLY. Example: my wife and I paid $0 in federal tax this year, and $4k in state taxes. Tax evasion is any illegal action to reduce your tax bill such as fudging numbers, claiming things you don't have documentation for, not recording taxable income, etc. I encourage you to abide by all tax laws to the letter, and focus your attention on tax avoidance - there are plentiful ways to legally reduce your tax bill. I started doing my own taxes at age 15, picked up a thing or two over the years.

A business professor once asked us

"Where do creative accountants end up?"

He waited for a few good minutes and replied "Federal Prison"

 

[Big Fin]

A business professor once asked us

"Where do creative accountants end up?"

He waited for a few good minutes and replied "Federal Prison"

Well, maybe. If so, they forgot the first rule of tax practice.....

Rule #1 - If someone is going to jail, make sure it's the client.