My wife&#39;s dad pays her for caregiving from his VA pension. How do we claim this income on our tax return?

Jon P. Beyrer, Dec 9, 2011

Jon P. Beyrer, CFP, EA, is a personal financial adviser, specializing in comprehensive financial planning and investment portfolio management. He is a partner of Blankinship & Foster, LLC, a fee-only wealth advisory firm in Solana Beach, California. He holds a Master of Science Degree in Financial and Tax Planning.

If your father is paying you for his care, you should report the income as self-employment income. You can deduct expenses you incur in providing the service, such as food, supplies, and other expenses for her care. The income and expenses would be reported on Schedule C of your income tax return, and you will also need Schedule SE to pay self-employment tax on the net income.

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jackiejnsn

Apr 7, 2010

What types of cares is she paying for out of that is the question? If it is medically related and needed then it can be itemized on your taxes under medical, if it is not concsidered needed then it probably cant be under medical.

evahelene

Dec 20, 2011

So if my father-in-law uses his funds (pension and social security) to pay his son-in-law to come into his home to care for him during the day, the son-in-law must report the funds paid to him on his income tax return, correct?

eaglescyn

Feb 22, 2012

My parents pay for their property and school taxes but the house is in my name can the get a tax rebate?

anonymous31857

Apr 4, 2012

Yes evahelene especially if it is more than 600$ annually. It sucks because self employement tax is high because it is your portion of social security and medicare. So in addition to paying self employment tax you pay income tax also. When I worked self employed I made like 10,000 my first year I paid 3500 in taxes. Good luck guys. And SDCinCA the expert Jon gave a very good and right on answer.

anonymous31857

Apr 4, 2012

Again sorry did not realize how old the original post was.

diavalon12

Apr 4, 2012

If your fatherinlaw is a veteran, which you already stated, He should file for aid an attendance through the local veterans office, it will can give him moren money in which to pay for services also he might be eligible for a caregiver depending on time of service, what his disability is etc. Contact your local Veterans office or ask for assistance at the local VA hospital. My mother had this benefit for years.

dupageflag

7 hrs ago

Wait a minute--if father pays, say, one fourth of mortgage each month as his fair share to live in home, does that count as INCOME to the daughter and son-in-law in whose name the mortgage is held???? And they're suddenly in business and have to pay income and SE taxes???? But then couldn't they deduct the entire amount of dad's payment because they are paying it all to the morgage company? What if they figure dad really gets MORE than 1/4th value of house by living there and not paying utilities etc, can they claim a LOSS on their Schedule C?