I am being paid $2000/mo. for the care an elderly woman who lives with me. Except for meds I pay for everything. What is tax deductible?

See a professional tax service. There are considerable offsets, but you need to keep all the utility bills, tax bills, mileage records, grocery receipts, personal items receipts. There is a lot of bookkeeping.

Check with your accountant. Contracted is tricky. You are responsible for ALL of your own taxes, social security contribution (employer and your portion). I would get a raise. It will be interesting to see what you will clear of this $2,000.00, my guess? Maybe half.

You pay your own taxes and they should be giving you a 1099 at the end of the year that's what we do with other caregivers. As far as other supplies everything needs to be in writing as to what you pay for what she paid for and keep receipts for everything.

Ps you'll be paying approximately 30% of your total income so you can figure save 30% of that 2000 for every paycheck so come the end of the year you'll have it. Is this through an agency or what? Do you have any time off?

I agree with the previous posters; there are several issues.

1. If all of the $2k is wages for care, it's reported as employment income.

2 If any of the $2k is for rent, it's reported as rental income, in a private home.

3. There may be issues of using your home, or part of it, as a business, and if so, there may be business tax deductions. The percentage of use as a business needs to be calculated since the entire home isn't used as a business.

4. I'm a little bit concerned about being considered as a contracted caregiver in a home that you presumably own. This is an issue on which I think I'd consult a tax accountant.

I realize I will pay my own self-employment taxes. This contract was set up with a family through their elder care attorney. I will deduct the square footage percentage of the house that is her space as business expense. And I will deduct mileage for taking her to appointments and picking up her meds. I was basically wondering if there is any type of straight rate deduction for her food, without actually keeping those receipts.