No w-2 and no 1099 - Schedule C?

[rtsietsema]

Spouse doesn't need to work, but has started helping at a daycare across the street for her home. In 2012 earned less than $400. Not a problem.

This year she tells me she was paid over $2000 working at the daycare. The daycare did not issue a W-2 or a 1099, and didn't really seemed like they want to, from what I hear.

The client doesn't have a problem reporting the income and paying taxes on it. Should it just go to Schedule C so she can pay the SE herself, and let it go? She has no expenses and really hasn't started a business. I cant think it would qualify just as "Other income", avoiding SE taxes. Without the proper reporting by the daycare, what other options are there?

[Burke]

Yes. I have the same situation with a kid who is doing tutoring, they are paying him cash and told him it was non-taxable because it was less than $600. Can't get a 1099 out of 'em. Paying him by the hour. What did you do last year with the "less than $400?" It can still go on Line 21, and a Sche SE completed.

[JohnH]

Schedule C is fine (or Schedule C-EZ).
There's no requirement to have a 1099 in hand when reporting self employment income. The requirement is to report the income.

[rtsietsema]

Last year

Last year I put the income on to Schedule C, but with the lower amount, it didn't generate an SE tax. Of course, this year it will.

I just wonder what else that daycare is and is not doing properly?

Of course that is not my problem.