What amount of Aid & Attendance benefit can I deduct on my income tax return?

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M

moonman Asked April 2012

What amount of Aid & Attendance benefit can I deduct on my income tax return?

I am the VA appointed fiduciary AND caregiver for my mother, who just got approved for an Aid & Attendance benefit from the VA. I understand that I will have to report this amount on MY taxes as income, as I am supplying the Caregiver services and getting paid for them. What amount of this can I deduct on my income tax return? Can I deduct the whole amount?

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score 0 · Answer 1

I thank everyone for their responses! Very confusing... At this point, I guess it would be in my best interest, to enlist the services of a professional

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score 1 · Answer 2

I think you will have to file Schedule C - self employed and pay self-employment tax (Social Security/Medicare) and federal and state tax.
Or your Mom can payroll you - like household help- deducting appropriate taxes and paying them to government. You would receive W-2.
Ask tax person - most don't want to handle personal payroll's - so you would have to do.
Easier to go self-employment route - you can deduct expenses you incur taking care of her before paying taxes.
She only has to pay you what going rate for care in your area is, not whole amount of Aid & Attendance benefit. Part of that benefit is for necessary supplies as well. I think only amount she pays you is taxable to you. Rest is not taxable.

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