SE tax or no SE tax

[ljwalters]

I have never done one of these before so if this is a stupid question I am sorry.

Father pays daughter for help in caring for him. This is income to her but is it subject to SE tax. Father is 92 years young with the beginning stages of Alzheimer’s. It can not be considered a gift because he gifts each of his children $12000 per year.

What do you think, SE tax or no SE tax? I seem to recall some rule about no SE tax for family members.

Linda and buddy

[grandmabee]

YOU ARE thinking of under 18 for family employess

I think you have a household empoyee who should be issued a w-2 and dad she file schedul H.

[ljwalters]

Ok, Thanks bcoleen. Maybe that is why I couldn't find any thing in my research, I wasn't including under 18.

Linda and buddy

[Pacun]

I think you have a HH and a dependent.

I have an 11 year old daughter and she makes my bed, looks for my keys and shoes. Goes and to check my mailbox and brings my mail, takes the rent check to the office and requests repairs. Looks for my remote control and sometimes changes my channels. I drop her off to school every morning and she warms my car.

She is my dependent and no W-2 is issued.

[ljwalters]

I think you have a HH and a dependent.

I have an 11 year old daughter and she makes my bed, looks for my keys and shoes. Goes and to check my mailbox and brings my mail, takes the rent check to the office and requests repairs. Looks for my remote control and sometimes changes my channels. I drop her off to school every morning and she warms my car.

She is my dependent and no W-2 is issued.

No Go. She makes to little cleans houses for a living and he has social security income higher than the 50% required for support. He lives in a motor home on her property (3 acres). But she does cook for him take him to all his dr. apts shops for him. She also makes sure he takes his meds and doesn't fall getting in and out of bed (one time this happened and instead of calling her, he called me to take him to the dr the next day). I happen to do all his financial work including paying bills and handling the movement off his various investments and taking him to the bank to make the gifts each year. None of his other 4 children will put up with the Alzheimers, but they don't like her getting paid. He only claimed her pay as a deduction one year because of an annuity he cashed out. But she claims it every year.

Good idea though

Linda and buddy

[Pacun]

No Go. She makes to little cleans houses for a living and he has social security income higher than the 50% required for support. He lives in a motor home on her property (3 acres). But she does cook for him take him to all his dr. apts shops for him. She also makes sure he takes his meds and doesn't fall getting in and out of bed (one time this happened and instead of calling her, he called me to take him to the dr the next day). I happen to do all his financial work including paying bills and handling the movement off his various investments and taking him to the bank to make the gifts each year. None of his other 4 children will put up with the Alzheimer’s, but they don't like her getting paid. He only claimed her pay as a deduction one year because of an annuity he cashed out. But she claims it every year.

Good idea though

Linda and buddy

I love when all the information is provided by my clients.