How to Fill Out Schedule C for Babysitting

Earning money from babysitting likely means you're considered a small business owner by the IRS, which requires you to report your income and expenses on Schedule C. This form might look complicated, but it’s a straightforward way to calculate your taxable business income. This guide will walk you through exactly how to fill out Schedule C for your babysitting services, from gathering your documents to understanding which expenses you can claim.

Who Is Required to File Schedule C for Babysitting?

If you're wondering whether you need to file a Schedule C, the key distinction is whether you are an employee or a self-employed independent contractor. If a family provides you with a Form W-2 at the end of the year, they consider you a household employee and you don’t need Schedule C. They’ve already withheld taxes from your pay.

However, you are most likely self-employed if you:

• Work for multiple families.
• Set your own hours and rates.
• Use your own methods and supplies (toys, snacks, etc.).
• Are in business for yourself to make a profit.

As a self-employed individual, you must file a tax return and include a Schedule C if your net earnings from babysitting were $400 or more for the year. Even if a family didn't give you a Form 1099-NEC (they're only required to if they paid you $600 or more), you are still legally obligated to report all the income you earned.

Gathering Your Information: What You Need Before You Start

Being organized will make filling out your Schedule C much easier. Before you sit down with the form, have the following information handy:

• Your Business Name and Address: If you don't have an official business name, you simply use your own name. Your address can be your home address.
• Your Taxpayer ID: This will be your Social Security Number (SSN) unless you have applied for and received an Employer Identification Number (EIN) from the IRS. For most sole-proprietor babysitters, an SSN is all you need.
• Income Records: This includes any Form 1099-NEC you received from families, as well as your own records of payments received. If you were paid through apps like Venmo or PayPal, run a report for the year. If you were paid in cash or by check, have your bank statements or a logbook ready to total your deposits.
• Expense Records: This is the most important part of lowering your tax bill. Collect all receipts for anything you purchased for your babysitting business. This includes digital receipts from email and physical paper receipts. We'll detail specific expenses later. Keeping these in a dedicated folder or using a tool like QuickBooks Self-Employed throughout the year makes this step simple.

A Step-by-Step Guide to Filling Out Schedule C

Schedule C, Profit or Loss from Business, is divided into five parts. For most babysitters, you'll mainly be focused on Part I (Income) and Part II (Expenses). Let's walk through the key lines.

Getting Started: Basic Information (Lines A-J)

At the top of the form, you’ll fill in some administrative details. A key line is Line B, where you enter the principal business or professional activity code that best describes your work. For babysitting and childcare services, the code is often 624410 (Child Day Care Services).

Part I: Income

This section is where you report all the money you made from your babysitting activities throughout the year.

• Line 1: Gross receipts or sales. This is your total income before any expenses. Add up every single dollar you received from every family for your services. Include payments made by cash, check, debit/credit cards, and digital apps. Enter the grand total here.
• Lines 2-6: These lines are for things like returns and allowances or cost of goods sold. As a service-based business, you will almost certainly leave these lines blank.
• Line 7: Gross income. For most babysitters, this number will be the same as the one you entered on Line 1.

Part II: Expenses

Now for the fun part: telling the IRS what you spent to run your business. Every dollar you list here reduces your taxable income, so be thorough. Only include expenses directly related to your babysitting work. Here are the most common deductions:

• Line 8: Advertising. Did you print flyers, pay for a listing on Sittercity or Care.com, or run social media ads? The costs for these go here.

• Line 9: Car and truck expenses. If you drive your own car to get to clients' homes or to transport children on outings, you can deduct the cost. You have two options:

  • Standard Mileage Rate: This is the simplest method. For every business mile you drove during the tax year, you can deduct a specific amount set by the IRS. You must keep a log of your mileage for this. The log should include the date, miles driven, and business purpose of each trip. Apps like MileIQ can track this automatically, or you can use a simple pen-and-paper notebook.
  • Actual Expenses: This method involves adding up all the actual costs of using your car for business—gas, oil changes, insurance, car payments, repairs—and then multiplying by your business-use percentage. This is more complex and usually only benefits you if you have a vehicle used almost exclusively for your business.

  Most part-time babysitters find the standard mileage rate is easier and provides a good deduction.

• Line 18: Office expense. The cost of office supplies like a planner, pens to track your hours, or a notebook for record-keeping can be an office expense.

• Line 22: Supplies. This category is very important for babysitters. These are items used up in the course of your work. Think about things like:

  • Craft supplies (crayons, construction paper, glue)
  • Snacks and drinks you purchased for the children (if you weren't reimbursed)
  • First-aid kit supplies (band-aids, antiseptic wipes)
  • Cleaning supplies used to tidy up after the kids
  • Board games, books, puzzles, and toys purchased specifically for an activity-based babysitting business.

• Line 24b: Meals. Be careful here. The cost of food you ate yourself while on the job is generally not deductible. Business meals are typically reserved for travel or meeting with clients to discuss business, which is rare for babysitters.

• Line 27a: Other Expenses. This is a catch-all for business expenses that don't fit into the existing categories. List the type of expense and the amount. Common examples for babysitters include:

  • Phone bill: If you use your personal cell phone for your business (coordinating with parents, marketing your services), you can deduct the business-use percentage of your monthly bill. Estimate the percentage of time you use your phone for work vs. personal use, and deduct that percentage of your annual phone costs.
  • Training and Certifications: The cost of getting CPR or first-aid certified, or taking early childhood education classes, is 100% deductible.
  • Insurance: If you carry your own liability insurance for your business, the premiums are deductible.
  • Bank Fees: If you have a separate bank account for your business, any monthly service fees are deductible.

Once you’ve listed all your expenses, add them up and enter the total on Line 28 (Total expenses).

Calculating Your Net Profit or Loss

This is the final calculation on the form and determines how much of your income is actually taxable.

• Line 31: Net profit or (loss). Subtract Line 28 (Total expenses) from Line 7 (Gross income). This is your net profit. If your expenses were more than your income, you have a net loss.

This net profit on Line 31 is the single most important number you'll calculate on Schedule C. It is the amount that will be subject to both income tax and self-employment tax.

What Happens After Schedule C? Understanding Self-Employment Tax

Your work isn't quite done. The net profit from Line 31 transfers over to two other places on your tax return. First, every self-employed person needs to calculate self-employment taxes (Social Security and Medicare) using Schedule SE (Self-Employment Tax). This tax rate is 15.3% on 92.35% of your net business profit.

While that might sound high, keep in mind that this covers both the employee's and employer's share of these federal taxes. The good news is that you get to deduct one-half of your self-employment taxes, which helps lower your overall income tax bill.

Bringing It All Together on Your Form 1040

The numbers from Schedule C and an eventual Schedule SE flow back to your main tax return, the Form 1040.

• Your net profit from Schedule C, Line 31, is reported on Schedule 1 (Form 1040), Line 3.
• The deductible portion of your self-employment tax from Schedule SE is reported on Schedule 1 (Form 1040), Line 15.

Tax software will handle all of these transfers automatically. You may also qualify for the Qualified Business Income (QBI) deduction, which allows some small business owners to deduct up to 20% of their business income. Most tax preparation programs calculate this for you if you're eligible.

Final Thoughts

Completing a Schedule C for your babysitting business comes down to one core habit: diligently tracking your income and expenses throughout the year. Doing so not only keeps you compliant with the IRS but empowers you to see how your business is actually performing and ensures you claim every deduction you rightly deserve.

As a babysitting business grows, questions about when to form an LLC, how to handle out-of-state income, or how to depreciate larger assets may come up. For the tax professionals who guide these growing businesses, getting accurate answers quickly is essential for client success. Our team uses Feather AI to get instant, verifiable answers from IRS publications and tax code, turning what used to be hours of research into a task that takes just a few seconds.