How Taxes Work if You Have a Paid In-Home Caregiver
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Stacey, an only child, was an in-home caregiver for her ailing mother for several years. She lived with her mom and cared for her while she completed college and graduate school, and even after she got married. However, after three children, one of whom has special needs, caring for her mother and her children became too much to handle for Stacey.
For years, Stacey put off her career as a physical therapist, though she vowed to go back to work when her children were all in school, at least part-time to make money for her household. She was offered a job in the field pretty quickly -- one she really didn’t want to turn down. Stacey realized that she needed help with caregiving and began interviewing paid in-home caregivers to take over some of the
duties during the day while she worked.
Stacey ended up hiring a caregiver named Agnes directly, rather than through an agency. Six months have passed and things are going well. Agnes inquired recently about how her income is taxed, since she has an appointment with her accountant in a couple of weeks to do her 2019 taxes. Stacey is realizing that she really isn’t sure whether Agnes is a W-2 employee or a 1099 independent contractor, since she
hired her directly. This was something she should’ve researched ahead of time, but was so focused on needing the help that she didn’t think to do so.
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Certified Elder Law Attorney and Medicaid Asset Protection Expert, Evan H. Farr, CELA, has written four best-selling books in the field of elder law. For more information and to order, click here.
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