Home bound medical providers

[cpabsd]

A new client spends roughtly 50K a year on care providers in residence. He has not issued 1099's or W2's before. However, he has taken the deduction on Schedule A. The 50k is to around 12 different individuals. I am of the opinion that if he takes the deduction, he should issue 1099's at minimum to individuals. He wants to treat properly for 2014. Any thoughts???

[Lion EA]

W-2 household employees. Unless one or more have a business and qualify as independent contractors instead; Form 1099-MISC for them.

[Gail in Virginia]

Just curious. If a person is incapable of performing necessary self-care, and would qualify for a nursing home but instead stays in a private facility, would the responsible parties need to do a 1099MISC to the private facility owner? I don't think it would be a W2 if it is not in their own home, and they are providing care for multiple persons. But if it is not a corporation, would a 1099 be required since it is not for services paid for 'in the course of your trade or business'?

[kcjenkins]

No, amounts paid for 'personal' purchases do not require a 1099. Just like if you hire a contractor to re roof your business, you must give him a 1099 but if you hire him to re roof your home you do not.

[HaroldinGeorgia]

Interesting discussion. I also had a new client this year; wife has dementia and is completely bedridden; should be in a

nursing home, but husband will not place her there. She requires 24 hour care, which he is not able to give. Has 3

caregivers (individuals) who come in on rotating shifts and provide care in the home. He has not given the caregivers

1099's; thinks it is up to them whether they report the income.

KC, would this qualify as "personal purchases", or should they be given 1099's?

Thanks for your input.

Harold

[kcjenkins]

I think they should be given W-2s as 'household employees, based on the situation as I understand it. UNLESS they are from a service that provides caregivers, like Visiting Angels, etc.

What IRS says:

You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also does not matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.

Household work is work done in or around your home by the following people.

• Babysitters
• Caretakers
• Cleaning people
• Domestic workers
• Drivers
• Health aides
• Housekeepers
• Maids
• Nannies
• Private nurses
• Yard workers

Workers Who are Not Your Employees

If only the worker can control how the work is done, the worker is not your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business.

A worker who performs child care services for you in his or her home generally is not your employee.

If an agency provides the worker and controls what work is done and how it is done, the worker is not your employee.

[HaroldinGeorgia]

KC, thanks for your response. That is what I told them, so they elected to have someone else do it.

As always, I appreciate your sound advice and guidance.

Harold

[kcjenkins]

You are welcome. Sometimes they just don't want to hear the truth, but we don't write the rules, we just work with them. So unless they work through an agency and the agency W-2s them, no way can you get away with 1099s for people working in your home. If they found someone who told them it was OK, you may get them back when that mistake bites them in the butt. If they do come back, be sure you add to their bill!