Babysitting, Lawn Care, and Self-Employment Taxes

You babysit. You mow lawns. You walk dogs. You shovel driveways. You do it for cash, no real "boss," no paychecks. Surprise: the IRS considers you self-employed, and there are a few rules you should know about. This article won't make you panic — most teens never owe much. But this is one to read with a parent if your earnings are creeping up. It's a good adult-skill conversation.

What "self-employed" means

When you work for an employer (like a fast food job), they handle your taxes for you and give you a W-2. When you babysit or mow lawns for cash, you're running a tiny business. You're "self-employed."

That doesn't mean you have to incorporate or anything fancy. It just means the tax responsibility is on you, not on a boss.

The IRS has a page for self-employed individuals that covers the basics.

When taxes actually kick in

The honest answer: most teens earning under a few hundred dollars a year casually never need to file. But once your net self-employment income crosses certain thresholds, things change.

For example: the IRS generally requires you to file a tax return if you have net self-employment earnings of $400 or more in a year. That's the main number to remember. The IRS Self-Employed page and the IRS Tips for Students page cover this.

Below $400: usually no federal filing required (state rules vary). At or above $400: you may owe self-employment tax (covers Social Security and Medicare).

This is true even if you're 14, even if you're paid in cash, and even if no one gives you a tax form.

Why the rule exists

When you have a regular job, your paycheck has 7.65% taken out for Social Security and Medicare. Your employer pays another 7.65%. Total: 15.3%.

When you're self-employed, you pay both halves. That's the self-employment tax. Above $400 in net earnings, the IRS wants its share so you eventually qualify for things like Social Security retirement benefits.

The SSA explains how Social Security credits work — every dollar of self-employment income earned and reported counts.

How to keep track (the easy way)

Don't make this a spreadsheet nightmare. Just open the notes app on your phone and write down each job:

Babysit Smiths, 4 hours, $60, May 12

That's enough. At the end of the year, total it up. If it's under a few hundred dollars, you probably never have to do anything. If it's over $400, take it to a parent.

You can also write down expenses you had directly for the work — a lawnmower part, gas for it, dog leashes, etc. Those reduce your taxable income.

Income tax vs. self-employment tax

Two different things:

• Income tax — what you'd owe on income generally. Most teens are under the standard deduction (around $14,600 in 2024 — check the IRS) and owe $0 in income tax.
• Self-employment tax — the 15.3% for Social Security and Medicare. Kicks in at $400 in self-employment earnings.

So you might owe self-employment tax even when you owe zero income tax. Annoying but true.

Babysitting and the "household employee" exception

Here's a wrinkle: if you babysit only for one family on a regular schedule, in their home, the IRS sometimes treats you as their household employee instead of self-employed. In that case, the family handles different paperwork. Most casual sitters fall under self-employment, but IRS Publication 926 has the rules.

In practice, most teen babysitting is informal enough that it's just self-employed income.

What to actually do

If you earned under $400 in the year:

• Write it down somewhere just to know.
• No tax filing needed (probably — check your state).

If you earned $400 or more:

• Tell a parent. Don't hide it.
• File a federal return. Free filing is available through IRS Free File for most teen-level incomes.
• Use Schedule SE to calculate self-employment tax.
• Owe a small amount (roughly 15% of net earnings).

If you earned $1,000+ regularly:

• Same as above, but consider tracking better and possibly making quarterly estimated tax payments so you don't owe a big lump sum next April.

You're not in trouble

The IRS isn't sending agents to bust kids who babysit for $300 a year. They want people who earn real income — and once you're earning $400+, real income includes you. Reporting it correctly when it gets there is just normal adult life.

Bonus: those reported earnings start building your Social Security record, which matters decades from now.

Words to know

• Self-employment tax — 15.3% combined Social Security and Medicare for self-employed people
• Net earnings — your income minus business expenses
• Schedule SE — the IRS form for self-employment tax
• 1099 — a form a client may send if they paid you $600+ (not always sent, but always reportable)
• Estimated taxes — quarterly payments self-employed people make so they don't owe a big bill in April

For more like this, see Learn hub, budget guide, or the glossary.

If you're not sure about anything in this article, ask a trusted adult — that's what they're there for.