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junoaging Asked November 2010

What do I need to do in order to deduct the cost of home care if I pay the workers directly?

My mother does not have long-term care insurance, but needs 24-hour care. We pay home-care-aides in cash. Do we have to register with the state as an employer ? Can the workers bill us and we treat them as self-employed free-lancers ? Are the rules the same for the IRS and for state taxes ?

BridgetW Nov 2010
Going through and agency has it's benefits such as an aid calling in sick, the agency will have a back up for you. Make sure the agency is State Certified, and does back round checks on employees. Interviews aids before they start care and make sure you develope a complete Care Plan with agency, so they can accomplish exactly what you are wanting. Bridget

toadballet1 Nov 2010
Have you thought of going through an agency? You may pay a little more, but you do not have to worry about screening aides, paying taxes, or worrying about insurance (should there be an accident).

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AgingCareEditor Nov 2010
Talk to a financial advisor before you make any moves. If you register as an employer and classify the aide as an indepedent contractor or employee, you might be setting yourself up for paying additional taxes as a business and/or employer. A CPA or financial planner needs to know the specifics of your individial situation, and from there, can help point you in the right direction.

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