Do we have to pay taxes on the money Mom pays me to take care of her?

A fellow caregiver asked...

If my mother lives with us and pays us money for me to take care of her, do we have to report this to the IRS? And if she does not report it to the IRS, is this wrong?

Expert Answer

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

If your mother pays you money to act as her caretaker, this is taxable income and should be reported as income on your income tax return. It is not necessary for your mother to report anything to the IRS or do any income tax withholding if you are considered an independent contractor. Your mother may be able to take some or all of the caretaking expenses as a medical expense deduction if her total medical expenses are more than 7.5% of her adjusted gross income and some of your caretaking activities qualify as medical expenses. You should discuss this with an accountant in detail to determine what you may be able to do in your particular case.