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So, our situation became somewhat more complicated last year, and I imagine we'll need to consult with someone, but just in case, I'm asking here. Last year, my father-in-law had a serious fall that required an extended stay in rehab before he was sent home. We had already been providing a lot of care for him, but that's ramped up since his discharge and he is no longer able to manage his affairs financially or otherwise. My wife has gone down to part-time work outside of the house to care for him. I have a WFH job that allows me to help when necessary as well. When she went down to part-time we drew up a new caretaker agreement that involved her father paying her for services in the home, which we have kept track of meticulously (she used to do Medicaid documentation). He is able to pay her for several years of these services because he retired with full pension from the Army Corps of Engineers and has several different types of savings. His children, my wife included, hold a POA jointly for him (2 half-brothers). We have lived with him since my mother-in-law passed in 2012 and he has had mostly gradual declines in his ability to take care of himself until last year. Now that we are in charge of his finances, we are trying to make sense of everyone's tax liability. Before 2023, he did his taxes separately and my wife and I filed jointly. We have one daughter living with us that we claim as a dependent, so there are 4 of us in the house. My original understanding was that he would need to apply for an Employer Identification Number (done), he would need to split FICA with Melanie, we would be taxed on money he paid Melanie, and so forth. But--is there a better way to do this? IRS documentation about taxation and caregivers seems to be predicated on the fact that caretakers live outside the home and are non-family members. Is there a more advantageous way to handle this when the pay is between family members all living together? We are trying to delay (as long as we can) the day that he will need to start pulling cash from his whole life insurance instead of other savings, as that money will mostly be going to his other children (the house will go to us), so we feel a responsibility not to overpay if we can avoid it.
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Mar 25, 2024 01:16
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| # ¿ Apr 28, 2024 15:10 |
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