Household employer - or not?

[FEDUKE404]

Sometimes I either read too much or too little into a tax situation.

Cast your vote on "household employer" aka Schedule H issues below.

SCENARIO #1
Elderly parent lives in own home. Adult son, in another city, will clearly be able to claim mom as a dependent on his MFJ tax return.
Extra care (medical and/or "housekeeping") is now becoming necessary for mom. Son will likely pay expense for such.
Who files any Schedule H? Mom has no income tax filing requirements (yes, I know Schedule H CAN be a standalone form).
The entire family might have to reconsider things if *mom* has to deal with EIN/W2s/FUTA/SUTA/withholding. Cognitive powers are already borderline.
(Other option would be to pay outside person, such as visiting home nurse or cleaning service, who would not be deemed an "employee" by anyone. I assume son could perhaps deduct some of these expenses, if appropriate, as additional dependent "medical expenses.")
The way I read things, with these circumstance mom must be the employer and the son cannot be deemed such, even if he wishes to accept the extra paperwork? Correct? ?


SCENARIO #2
Retired couple files as MFJ. Spouse is in assisted living facility. Husband lives alone in (formerly joint) residence.
Husband pays outside person funds (fixed hourly rate) to assist spouse, with such things as supplies/clothing/"organization"/etc. Bulk of work performed by outside person is at the assisted living facility, but some shopping trips for clothing/supplies are necessary.
While (some of) these expenses could, perhaps, be deemed as an additional medical expenditure, none have ever been deducted as such.
Recent (joint) tax returns have included a Schedule H for this "household employee." I see no reason why that action presents a problem. Correct? ?


Thanks for your 2¢ worth on these questions. The summer heat must be getting to me once again. . .

FE

[kathyc2]

#1- I don't see what difference it would make to IRS who filed the H, but I would say if son is the one paying, he is the employer.

"The way I read things, with these circumstance mom must be the employer and the son cannot be deemed such, even if he wishes to accept the extra paperwork?" Maybe if you post the specific passage of what led you to this conclusion, people can weigh in.

#2- Does the person providing care "work" for several residents of the care center or elsewhere? Depending on the circumstances, she may not be a household employee but rather someone operating a business.

[FEDUKE404]

Household employee clarifications

#1- I don't see what difference it would make to IRS who filed the H, but I would say if son is the one paying, he is the employer.

"The way I read things, with these circumstance mom must be the employer and the son cannot be deemed such, even if he wishes to accept the extra paperwork?" Maybe if you post the specific passage of what led you to this conclusion, people can weigh in.

#2- Does the person providing care "work" for several residents of the care center or elsewhere? Depending on the circumstances, she may not be a household employee but rather someone operating a business.

Question #2: Person providing services has a full-time (employee) job in a field unrelated to health care. The care/assistance being provided is something in place between the two parties to deal with some of the "extras" the husband cannot personally manage, due to a number of factors. Total compensation paid to the caregiver is, by design, close to but less than $1,900 annually due, to a large extent, Schedule H paperwork considerations. Caregiver essentially treats the income as a part-time job, and has no other income of this type.

Question #1: There is no specific passage I was relying on. . . For purposes of Schedule H, whose "household" governs?? The "householder" who actually pays the bills, or the "householder" who lives under the roof of the residence where the actual care occurs. Stated a different way, which person is really "employing" the caregiver and hence would be subject to Schedule H issues? Or, is something like a "satellite household" even possible???

Maybe I'm just over-thinking the issue. . .

FE

[kathyc2]

Question #1: There is no specific passage I was relying on. . . For purposes of Schedule H, whose "household" governs?? The "householder" who actually pays the bills, or the "householder" who lives under the roof of the residence where the actual care occurs. Stated a different way, which person is really "employing" the caregiver and hence would be subject to Schedule H issues? Or, is something like a "satellite household" even possible???

Maybe I'm just over-thinking the issue. . .

FE

Since it's a tax payment rather than a tax benefit, I still don't see why it makes any difference which one files from a tax perspective.

[Kram BergGold]

My Vote

scenario 1- Mom is the employer. However the son could do all the paperwork for Mom.

secerio 2- provider is a Schedule H employee and it sounds like very little it medical. To me for expenses to be medical either the provider has to be a medical professional, a Doctor has to put in writing what items are medical, or the Spouse in the facility has to be deemed unable to do two of the RDA's.

[FEDUKE404]

Conclusion?

scenario 1- Mom is the employer. However the son could do all the paperwork for Mom.

secerio 2- provider is a Schedule H employee and it sounds like very little it medical. To me for expenses to be medical either the provider has to be a medical professional, a Doctor has to put in writing what items are medical, or the Spouse in the facility has to be deemed unable to do two of the RDA's.

#1 - That is the direction I'm leaning, viz "employer" (and owner/filer of Schedule H) is mom but son can/would do most of the paperwork. Recent contact with son, who stated he is now leaning toward dealing with a "provider" of the professional type and just paying the bills. There was some "family talk" of hiring a relative to perform the services, which might have mucked up things a bit all around. My read of things is that, at this time, expenses for mom would be more of the "housekeeper" mode than the "medical" mode. Does she need a cleaning lady/cook or a nurse?

#2 - Only potential issue I saw is where the "household" is. . .but it is a MFJ joint return. As stated previously, there has been no claiming of the wages paid as a medical deduction and that is unlikely to change. Already being in an assisted living facility might tilt the tables a bit, but probably not worth the effort (risk) to pursue.

FE