My husband and I help my elderly mother in exchange for rent and about $1000 a month. How do I put this on my taxes? How does Mom?

AnnAnn, I worked for H&R block for 11 years and must say some advice here is not quite correct. Without looking at the whole picture for you and mom its impossible to give correct advice. I suggest you see a tax planner before years end. That way they can make sure you do everything correctly before years done. H &R block has year round offices and many times will answer questions free or for just small fee. Ask for an appt with an enrolled agent. And as was mentioned gifting is fine IF mom is not going to have to go on medicaid for at least 5 yrs.

If she pays you, you cannot claim her. Ive had my mom almost 8 years and could never claim her, even if she helps with any bill, you cannot claim her as a dependent. You have to pay 30% taxes on the $1,000 she gives you though, which dwindles it down to about $700 a month. We had an accountant, keep records of everything and pay taxes on what she gives you. If you make out a caregiver contract and she has money to pay you, you could get more if she cannot live alone, but again, pay taxes on that too. It so sweet of you to take her in, youre wonderful!!! Just know you are doing a wonderful thing and hopefully someone will let you live with them some day.

Firstly, is your mother's estate put into a trust? You'll have to find that out before you file her tax returns.

You have to be careful of the gifting, though, if there's any chance that your loved one will run out of funds & require Medicaid within the next 5 years. If that would happen, YOU would be responsible for paying out of your pocket for the equivalent amount of care. For example, let's say Mom gifts you $14K before running out of funds & needing Medicaid to pay for nursing home care. The nursing home charges $5K/mo. YOU would have to pay for 3 months nursing home care before Medicaid would step in. I would think you'd be much further ahead...and much safer...seeking the advice of an elder lawyer who is well-versed in Medicaid law/planning. It's quite conceivable that they may recommend that you have a care contract in place to justify the $1K/mo as a care expense & not a gift. In that case, the $1K would be filed as self-employment on your taxes & Mom could write the expense off on her taxes as a medical expense.

Also, it's my understanding the $14,000 gift is per person. Since there's both you and husband that's $12,000 in cash and I'm sure 'rent' would be under that amount. However if everything is in your name only (rent at your own house and checks she writes you) that would probably go over the annual limit.

Your mom can gift you up to $14,000 a year tax free. Over that she would pay taxes on the gift. If you are living with her rent free I don't believe that qualifies since people who've lost jobs etc live with family members all the time. I believe if she's paying your rent on your own place it would go under the gift. If she's paying you like an employee you'd have to file as self employeed and I'm not sure how she'd write off that money, I'd definitely consult tax expert there. Here's the IRS link about gifts. HTH! https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes

Ann i can help you just a few questions. Are you paying mom rent? I assume you live with her? If you can answer these questions i can give you a better reply

Yes, complex..Please clarify for me. Are you living in her house rent free?
If so I'd personally not say anything about that seeing as you are immediate family. If not, I don't know what to suggest. As for the $1000 payment, I would ask her to write a check to "cash" and give you green money..It is obvious to me that such an amount, merely a stipend, does not begin to adequately pay you for your loving, and apparently 24/7 devotion. Caregiving is wonderful yet it is more enervating over time than any activity I can imagine.

Grace + Peace,
Bob

This is a bit complex, I would talk with an accountant or tax adviser.