Tuesday, August 10, 2010

First day of babysitting and thoughts on taxes

Today was my first day with my 5-month-old new client. My kids were very excited and brought toys for the baby, played music, and asked to watch him sleep. They played with him for the first hour and then I sent them off to play while I tried to figure out if he really wanted to nap or not. I didn't ever really figure out what he wanted (was he hungry or sleepy?) and we mainly just spent some time together on the glider, but we have now been formally introduced. I had forgotten how hard just holding his head up is for a baby this age. The living room is very nicely set up, but now that I have seen the baby, I think I should get out my sling and the Jumperoo.

I last babysat professionally back in Washington DC when our two kids were both very small. My husband was somewhat concerned about the tax implications of this business. Although Texas doesn't have income tax (but does have a sales tax and a stiff property tax), the state requires businesses to pay a couple percent tax on all of the property used to transact business (with exceptions for things like personal vehicles). This is extremely onerous, hard on new or struggling businesses, as well as discriminatory for the following reasons. 1) It's not that easy to figure out how much stuff (particularly used stuff) is worth. 2) The inevitable subjective factor in deciding value is unfair to the honest or scrupulous. 3) Businesses vary in how much equipment they use. Texas tax law unfairly punishes businesses that require expensive equipment. You are taxed on your expenses, not your income, which is perverse. 4) You owe the tax whether or not you made any money that year. 5) This is particularly discouraging to small or new businesses, who have not yet made the sort of money to make this expense a matter of indifference. On reflection, I decided that if we Craigslisted all the baby equipment, toys and books used for my babysitting business, we would be very lucky to get $100 total. So we will be fine. However, I don't think a two-hour-a-week babysitting operation ought to require quite so much soul-searching and tax expertise.

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