How do I calculate the taxes I will owe after being compensated to care for my elder Mom and quitting my job?


I quit my job to stay with mom after dad died. She needs 24 hour care and she and dad had money set aside to compensate me for my time as I have no other income. I need help figuring out what I will owe on taxes in the state of California.

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You and your folks need the counsel of a tax professional. THEY need to provide you with a W2 at the end of the year and should be paying, or will have to catch up on, their portion of your Social Security obligation. Have a pro explain how this should be handled. From there, your responsibility is the same as if you were working at any other job.
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Chezzy, you'll calculate them the same way you would if you were working at any other paid job. Multiply your hourly rate by the number of hours you expect to work to get a weekly rate, then multiply that by 52 weeks.

If your mother will be taking deductions, you'll need to search the California tax website to determine the appropriate amounts to be deducted from your weekly or biweekly earnings, depending on how frequently you're paid.

California likely has publications addressing the issue of calculating and paying the necessary deductions, including how frequently and where to send the payments, so you may have to handle that for your mother.

Don't forget about the federal taxes as well.
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Chezzy, I assume you are talking about income tax? Do you have a caregiving contract in place? I understand that is necessary if your mom ever needs Medicaid in the future.
I'm not from the States, but I imagine plugging your numbers into a tax software program would give you a rough idea about dollar amounts if that is all you are looking for. It would probably be worth the money to get everything set up by someone familiar in tax prep for caregivers for the first year.
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