i babysit my next door neighbor's kids for $ 80.00 a week under the table will i face legal issues

Not likely. While technically this should be reported, so should garage sale profit and the money kids make mowing lawns.

Don't worry about it.

All you need to do is include these amounts on your income tax return for the year. Talk with whoever prepares your tax return about it.

There are certain minimum thresholds for withholding social security taxes. For more details, check www.irs.gov, which gives the minimum amounts (per quarter) for withhholding of taxes. Even if nothing is withheld by your employer, you are technically required to show that as income. However, there are minimum thresholds for filing any tax return at all, and it is doubtful that the IRS will audit you in this situation.

The following post is for educational purposes only and does not create an attorney-client relationship between us.

You have to make a certain amount of income over the course of a year before you are obligated to file a tax return.

If, for example, your filing status is single, under 65, and your gross income in 2008 was less than $8,950, you would not even be obligated to file a tax return. It, however, may be to your advantage to file a return if you qualify for the earned income tax credit or any other refundable credits.

The IRS publication found at the following link will provide more specific details for you, based on your particular situation.