I'm the daughter and I'm my mother's representative. I asked a friend to help with caretaking as it was needed unexpectedly. Mom is a dementia patient. We're only talking about 4 months but I asked her to do it as a favor for $10.00 an hr cash while I was at work. We have paid her with moms SS funds and some family support. Mom has not filed taxes for years since she has a very limited income about $1600.00 a mo. I want to do what is right and if that means paying my caregivers taxes then that's what I might have to do. If I classify her as a contractor who is issuing/submitting 1099? Me as the representative under my tax responsibilities or my mother? I am completely stressed out after reading these posts. "V"
The rub is going to be that in order to do the 1099, you are going to have to get her to fill out & sign a W-9. As you need the info on the W9 to do the 1099. If she was thinking this was going to be unreported income, well there’s going to be unhappiness as 1099 will mean taxes due as not withheld on the income, 1040 long needs to be done. If she’s on any at-need program, extra income could be a problem.
It's not your problem if the CG was not planning to report income. You have to get the1099 out and she will have that before she files. If she files too soon, she can file an amended return. I'm in favor of everyone paying their fair share of taxes as written in the tax code. Hiding income is fraud.
Could be a big mess if you claim it and she didn't.