Am I an independent contractor for tax purposes for taking care of my Mother (95)?

Rmiller - gifting by IRS is allowed BUT if they ever apply for Medicaid, the $ gifted can get a transfer penalty by Medicaid. Penalty will be a certain # of days in which medicaid will not pay the facility. Family will have to private pay to keep elder there. So often the family member gifted will flat not pay back the gifted amount so other family gets saddled with the private pay costs.

Rmiller - yes! Yes! on the Block year round tax offices. I use them for my inc. biz & our Llc's. Most are enrolled agents & many worked for IRS. Mine was a forensic accountant with a top white shoe law firm before joining Block.

Miles - "working" for your parents isn't going to meet the criteria to be an independent contractor. If you get audited - which increases for self employed filings whether you work as a caregiver or a painter - a living in the home caregiver as independent contractor will be found to be incorrect and will have taxes & penalty due. Theres a lot of info on how household workers - nannies, caregivers, maids, etc. - report to IRS on the web.

Did an elder law attorney draw up the caregiver contract? If so, I'd call the office to ask for names of CPA's or tax pros they work with. The law firm will have contact names for you.

Whatever the case you need to have all this done correctly with taxes and reporting so no glitches down the road. Mom could need a higher level of care and you could run out of steam or ability. Dad is already in a facility, right? So $ needed for dads memory care and also for facility for mom. Could mean between the 2, every $ is needed for facilities so no more $ to you; or they run out of $ so applies for Medicaid and you don't want $ paid viewed as gifting so a transfer penalty placed and parents ineligible. Think carefully if medicaid could be needed in the future as their eligibility rules are unforgiving and complex.

FMLA is designed for limited time frame events. It was never designed to provide a funding source for caregivers who leave their job to do LTCaregiving.

mileskyhi, if you are referring to FMLA [signed into law in 1993 by President Bill Clinton] then I agree, that is not the answer because you only get 12 weeks during one year. But it does work if one needs that time to get an elder settled in a continuing care facility or moved an elder to another relative for care. Or use FMLA in bits and pieces during the year in case a caregiver needs time off and you want to fill in for a week or two.

I am glad I never used my FMLA to take my parents to doctor appointments, or other time off... I used my vacation days, sick days, and days without pay. I was qualified to use FMLA for myself when diagnosed with cancer and needed to be on recovery for two months. It guaranteed that my job would still be there when I returned.

Another thing I forgot to mention to you is gifting. Mom can gift a certain amount to you tax free to you each year. Mom does have some tax obligations on the gift but this may work for u guys, again explore that option with tax advisor. When I worked there I was office staff so I picked up a lot but I'm no tax expert. Keep in touch I would like to do a blog post on my site about this issue and could use your input. Hang tight we'll make it!

Thank you ramiller, all this is so new. And what I am gathering from every bit of info I can get my hands on is.....and this is just my opinion, the government would prefer you pay a stranger to take care of your mother or father than legitimize the fact that an adult child can provide the same care. I worked for a large global corporation, and I can tell you, Family Leave to take care of elderly parents is not the answer, as Presidential Candidate Hillary Clinton seems to think will solve everything. It is not easy to get Family Leave for many, and getting it and taking time off, without penalty, is not entirely the truth. I am not for or against anyone, however, this seems to be a subject that is going to be a very important topic for most taxpaying Americans. I am just realizing what the the majority of you know, Full Time Caregiving to an elderly parent IS A FULL TIME JOB! I have very little time for doing anything for myself! And by claiming I am a Full Time Caregiver, I will be over scrutinized by the IRS! Maybe it is time there are clear guidelines and tax information for FAMILY CAREGIVERS. This is a career for me for the next week, month, year or years. FAMILY CAREGIVERS should not be penalized for what is not only a labor of love, it is LEGITIMATE HARD LABOR!

Oh and FLA has no state income tax woray!

May I suggest you go to H & R Block they have year round offices. Ask to have an appointment with an enrolled agent. They will explain all the rule the IRS has and advise you. I worked for them for 11 years they have many good agents. They will usually do an initial consultation for free.
Another suggestion would be care. website. They have a program called nanny pay. It can be used by mom to pay you as an employee taxes taken out and you will get w2 like regular employee. This way all the tax obligations for both you and mom are taken care of. Another advantage may be that if mom pays you as caregiver she can write off as medical expense which my benefit her come tax time. But check with tax advisor, them no surprises at years end. Best to you. You are doing a wonderful thing for mom.

When it comes to the IRS, it is the same nationwide. With my career I had been an independent contractor for decades, I had to pay estimated taxes four times a year to the IRS [Form 1040-ES]. Now for State taxes, it might be different.

Thank you for all your input and information. Living in Florida, everything is different. I am doing a great amount of research and will post my findings.

As an independent contractor you still pay taxes. You really do need to sit down with a tax consultant and get some good information. Bring the contract with you.

If it is more advantageous for you to file as an independent contractor, I doubt the IRS would question it, frankly. But you will end up paying self-employment taxes. Don't know how you would avoid that.

Social security and Medicare taxes for self employed equal 15.3% of your net income.

From the gross money mom pays you, I could see easily deducting mileage if you're using your own car. Or, it might be better if you deducted gasoline and car repairs instead.

Not sure what else you could deduct...

You might be better off having mom pay you as an employee. While you couldn't deduct expenses, your Medicare and Social Security taxes would drop in half.

Technically, if the IRS questioned your status as self employed, I think you'd have a hard time defending your position.