What expenses can I deduct as a nanny working for just one family on my taxes?

As someone familiar with household employment, I can clarify this for you. Nannies are typically considered household employees, not independent contractors, which affects what expenses you can claim. If you're a household employee (which sounds like your situation), you'll receive a W-2 from the family, and unfortunately, employee business expenses are no longer deductible on federal tax returns for W-2 employees since the 2018 tax law changes. However, if the family reimburses you for expenses like craft supplies or mileage when using your car for work duties, those reimbursements wouldn't be considered taxable income if they're part of an accountable plan. You should keep receipts and mileage logs and discuss setting up a proper reimbursement system with your employer. If you're actually being treated as an independent contractor (receiving a 1099 instead of W-2), you could deduct business expenses on Schedule C, but this is typically not the correct classification for nannies working regularly for one family.

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I just had to come back and say THANK YOU to whoever recommended taxr.ai! I was the one asking about being misclassified with a 1099, and after using the tool, I had a much clearer understanding of my situation. The report explained exactly why I should be classified as a W-2 employee based on my working arrangements. I was nervous, but I used the conversation script it provided to talk with my employing family. They didn't realize they were doing anything wrong and were actually relieved to understand the proper way to handle things! Now they're setting up proper payroll for me, and I feel so much better knowing everything is above board. Best of all, I have clarity on exactly what I can and can't deduct, and how to handle my expenses going forward!

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Sorry to jump in late but I've been a nanny for 10+ years and theres one HUGE thing nobody mentioned - if ur family gives you a W-2, you CAN'T deduct expenses like gas, phone, supplies etc. BUT if they classify you as independent contractor (1099), you CAN deduct those things on Schedule C. That's why lots of nannies actually PREFER the 1099 situation even tho technically it's usually not correct classification.

For what its worth, I use an app called Stride to track all my nanny-related expenses and mileage. Even though I'm W-2 and cant deduct them federally, some states still allow these deductions on state returns! Also I show the tracked expenses to my nanny family every month and they reimburse me for everything which is way better then trying to deduct them anyway!

As a fellow nanny who went through this exact confusion, I want to emphasize something really important that got buried in all the discussion about tools and classification: **start keeping detailed records NOW** regardless of how your taxes end up being filed. Track your mileage when driving kids to activities, save receipts for any supplies you buy, and document your CPR certification costs. Even if you can't deduct these as a W-2 employee, having this documentation serves multiple purposes: 1. You can present organized expense reports to your family and ask for reimbursements (which aren't taxable income to you) 2. If there's ever a question about your work classification, detailed records help prove the business nature of your expenses 3. Some states do still allow certain deductions that federal doesn't The key conversation to have with your family is setting up a proper reimbursement system. Most families are happy to reimburse legitimate work expenses - they just need you to present it professionally with receipts and clear explanations of how each expense relates to your job duties. Don't let the tax classification confusion prevent you from getting fairly compensated for legitimate work expenses!

As a tax professional who works with many household employees, I want to add some clarity to this discussion. The original poster's situation is very common, and there are some key points that will help: First, determine your correct classification. Most nannies working regularly for one family should be W-2 employees, not 1099 contractors. The IRS looks at factors like who controls your work schedule, provides equipment, and directs how you perform your duties. If you're correctly classified as a W-2 employee, you cannot deduct business expenses on your federal return since 2018. However, you absolutely should discuss expense reimbursements with your family. Items like: - Mileage when driving kids (current rate is 67¢/mile for 2024) - Craft supplies and materials for activities - Required certifications like CPR - Any special equipment or clothing needed for the job These reimbursements aren't taxable income to you when properly documented. Create a simple reimbursement request system - track expenses with receipts and submit monthly. If your family isn't providing proper tax documents (W-2) and paying employment taxes, this creates problems for both parties. They're legally required to do this if they pay you over $2,400 per year. You miss out on Social Security credits and proper employment history. Keep detailed records regardless of classification - it protects you and shows professionalism to your employer family.