Taxation for Caregivers

Home Fairmark Forum Other Tax Topics Taxation for Caregivers

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
  • #5004

    Each month my brother receives a $2000 check from my elderly walker-bound mother. This check is for:

    Caregiving: $1500
    Handyman/Gardening/Housekeeping: $300
    Rent assistance: $200

    The caregiving requires that he stay at our mom’s house 4 days/week. It includes ordering & dispensing meds, assisting mom to get in and out of bed, grooming, light cooking, transporting mom to appointments, encouraging and leading physical therapy exercises and fall prevention/quick recovery.

    My brother also does some gardening/handyman work for a few other people, from which he averages $150/month. He has no other income.

    Question 1: Which 1040 line should my brother put his monthly earned income of $1950 ($1500 + $300 + $150)?

    Question 2: Can my mom deduct her $1500/month caregiving expenses on her return?

    Question 3: Is there anything else we should know?


    This is my take on question 1:

    He will pay both self-employment tax (15.3%) and income tax (10%) on the $1950 per month, $23,400 per year.

    Self-employment tax (medicare + social security) is 15.3% or (.153 x $23,400) = $3580.

    His income tax is calculated after deducting his standard deduction and deducting 50% of the amount of his self-employment tax. Income of $23,400 – $1,790 (1/2 SE tax) – $12,200 (standard deduction) = $9,410. His tax rate is 10% so he will owe $941 in income tax.

    Total tax will be $3588 + $941 = $4,529

    He will use Schedule C-EZ and Schedule SE to document his income and calculate his self-employment tax.

    His self-employment income from Schedule C-EZ will flow back to line 3 on Schedule 1 and then to line 7a on Form 1040. The deductible part of his SE tax (50% of the total SE tax) will flow from Schedule SE to line 14 in the Adjustments to Income area of Schedule 1 and then to line 8a on his Form 1040.

    The amount of his self-employment tax from Schedule C-EZ will flow to Schedule 2 line 4 to line 15 on Form 1040. He will put his income tax amount on line 12a of Form 1040.

    Looks like he will need to fill out:
    Form 1040
    Schedule 1
    Schedule 2
    Schedule C-EZ
    Schedule SE

    Hopefully, someone will point out any errors or you can double-check by looking at the forms. I always use tax software so never really look at forms but they are available on the IRS website with a quick search.

    The good news is he is building social security credits.The bad news is he has a tax bill due in April 2020 if he hasn’t been making estimated payments during the year…which he probably needs to do in 2020.


    Thank you so much Florida. Very helpful!

Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.