It's her money, why should the government care? My friend has her own medical coverage and a PT job. Isn't this just like hiring a baby sitter? I've been reading about independent contractors and employees. I've got enough issues without becoming an employer and dealing with tax issues. What can be done so we can keep her on? This whole issue of once she makes so much we become an employer boggles my mind. Can't we just do what we want with mom's money?
Either the woman you knew wasn't discreet about paying her help or her help wasn't. Somebody ran their mouth to someone. That's why she got in trouble. Or she tried to claim a deduction on her taxes for what she paid out for caregivers.
When people are discreet and keep their mouths shut, it works out.
Homecare agencies do not supply health insurance to most of their employees. That's why they keep the aide staff who works in the people's homes part-time only.
Regarding babysitters over 18 who are not specific family members,
Here is a link to the IRS
https://www.irs.gov/taxtopics/tc756
There are a number of businesses that will handle payroll taxes for you if you don’t want to do it.
if NH in your area run $ 10k per month, that’s $ 300,000 needed.
Nobody is going to have to declare anything if they can keep their mouths shut.
We're not talking about laundering millions of dollars in drug or organized crime money.
We're talking about paying a friend to help out part-time with the mother.
If mom isn't getting any services from the state and there aren't any people like social workers and care agency nurses involved, she can spend her money on anything she wants because it's her money.
If she or her daughter (with mom's permission of course) withdraw a few hundred in cash each week and give the friend an "envelope" they don't have to answer to anyone where that money is going.
They can pay the friend by Visa Gift Card every week if they want.
Trust me. There are ways to get around it and no caregiver (agency or private) has never at some point accepted a cash job.
KEEP YOUR MOUTHS SHUT.
You, your family, and your friend who's willing to take care of your mom part-time don't have to be announcing your business to the whole world, now do you?
There isn't an in-home caregiver (agency or private) in the world who hasn't taken a little bit of cash pay here and there. In fact, there are actual care agencies that find caregivers for clients who are paying in cash. They demand a one-time per job fee from the people they find the jobs for. I can't even say "employees" because they don't actually work for the agency nor do they get paid by them. I may or may not have taken work like this over the years from such agencies that are a very quiet and exclusive community. The pay is always top and so are the caregivers. Only the best, but if you do anything wrong, you're blacklisted and never work privately again.
Does your mother qualify for the paid family caregiver program that states have through Medicaid? If so, then you collect the money (which is non-taxable) in your name and take care of your friend who's taking care of mom.
There are plenty of ways to get around a situation like yours. You just have to be creative. Ways like buy her a Visa Gift card every week and pay her that way. Or literally give her an envelope of cash with your compliments.
If the time comes when mom needs to be on Medicaid, and the five-year look back period hasn't passed yet, tell them the weekly withdraws were because she ate out all the time. Or she went to bingo, did casino gambling, or bought large numbers of lottery scratch tickets every week (like so many seniors do). The point is there's no way to prove or disprove these things. There's no way to prove or disprove your friend getting paid in cash either.