My Mom is not eligible for state aid. I am a retired AF Medic, CCMA with other care-giving experience, so it makes sense for me to provide her care. We want to preserve her assets for as long as possible, legally. She is mentally competent, but gets confused at times (will forget to call for help and try to get out of bed even though she cannot walk alone, a bit of ST memory loss). Since this prevents her from appropriately 'directing' me in my duties I am required to care for her as I deem necessary, in her best interest, at any time day or night. I think I can be an Independant Contractor for compensation (I will not be able to work another job) and I would be able to set much of that income aside in an account for her future enjoyment, hopefully. We will also rent her room out to her (recommended by a Tax Advisor) and set that portion aside. Would we complete a Caregiver Contract and both just file as employer/1099 at tax time, or is there more to know? We're in Texas. Thanx So Much.
Try to find an elder care attorney who also has a LLM in Tax. Or, have a meeting with both the attorney and the Tax Advisor -- all together. Make sure that the Tax Advisor understands about personal services contracts. Ask about possible ways to structure this so that you are not considered a W-2 employee or a 1099 independent contractor.
there are several good companies that do payroll for just one employee.
The penalty for getting caught is pretty stiff. Also, it will continue to contribute to your own Social Security and Medicare eligibility too.
as for the rent, and other...this would be a 1099.
Make sure you you have a written contract. This is so protect you from future accusations that you took advantage of her, and protects her eligibility for Medicaid should it ever come to it....you can show the money was NOT a gift according to their rules.
If no, then leaving it right where it is should be sufficient.
If yes, you need to leave it right where it is, it is fraud to hide or transfer assets so others have to pay for someone's care via Medicaid.