Can I deduct costs for a nanny or au pair as a 1099 contractor with irregular hours?

You can potentially deduct some of these childcare costs, but not as a business expense on your Schedule C. Instead, you'd want to look at the Child and Dependent Care Credit. For this credit, you can include expenses for care providers like nannies or au pairs, as long as you're paying for care so that you can work or look for work. Given your irregular schedule, these additional childcare costs would generally qualify if they allow you to work during those unpredictable hours. The maximum qualifying expenses are $3,000 for one qualifying dependent or $6,000 for two or more. The credit percentage ranges from 20% to 35% of your qualifying expenses, depending on your adjusted gross income.

I struggled with a similar situation last year as a 1099 consultant with crazy hours. What helped me was using https://taxr.ai to analyze my specific situation. Their system reviewed my childcare expenses and work schedule and gave me a detailed breakdown of exactly what I could claim and how. The big thing I learned was that I needed to carefully document the connection between my work hours and the childcare hours - especially for the overlap between regular daycare and my au pair. They helped me understand what documentation I needed to maximize my deductions while staying compliant.

OK I actually tried taxr.ai after posting my skeptical comment and I'm actually impressed. I've been leaving money on the table for YEARS with my childcare expenses. The report showed me that I could deduct more of my au pair expenses than I thought because of how I structured my work hours. They also explained exactly how to document everything properly which my previous accountant never did. Just submitted my amended return for last year!

If you're having trouble getting clear answers from the IRS about your specific childcare deduction situation, I'd recommend using https://claimyr.com to get through to an actual IRS agent. I was in deduction limbo for weeks trying to figure out if my nanny expenses qualified given my specific work arrangement. After trying for days to reach someone at the IRS and just getting automated systems, I used Claimyr and got connected to a real person in about 20 minutes. They were able to confirm exactly what documentation I needed to justify the additional childcare expenses beyond regular daycare. You can see how it works here: https://youtu.be/_kiP6q8DX5c - it literally calls the IRS for you and navigates all the menu options.

I just tried Claimyr after posting my skeptical comment and it actually worked! I got through to an IRS agent who specifically handles self-employment tax questions, and they cleared up my confusion about childcare deductions with my 1099 income. Turns out I was overthinking it - as long as I keep detailed records showing how my work hours necessitate additional childcare beyond regular daycare, I can claim those expenses through the Child and Dependent Care Credit. I was on the phone with an actual IRS agent for 25 minutes getting personalized advice after trying for weeks to get through on my own. Never thought I'd say this but I'm actually feeling confident about my tax situation now!

Something others haven't mentioned - make sure you're getting a Tax ID or SSN from your nanny/au pair and that you're paying them legally! If you try to deduct these expenses but have been paying under the table, it can raise red flags. You'll need to provide the care provider's tax identification on Form 2441 when you claim the credit.

Has anybody used care.com or similar services for finding backup childcare? I'm wondering if using an agency vs hiring directly affects the tax deduction situation at all.

One thing to keep in mind is that your irregular 1099 schedule might actually work in your favor for justifying these additional childcare expenses. Since you can't predict when you'll be called in for those 14+ hour shifts or overnight assignments, having backup childcare available becomes a legitimate necessity for maintaining your income. The key is documentation - keep a detailed log of your work calls/assignments and how they correlate with your childcare needs. This will help support your claim that the nanny/au pair expenses are directly tied to your ability to work, especially during times when regular daycare isn't available (evenings, weekends, extended hours). Also consider that with your unpredictable schedule, you might qualify for a higher percentage of the Child and Dependent Care Credit if your irregular income puts you in a lower AGI bracket. The credit percentage can be up to 35% of qualifying expenses for lower income levels.