Claiming caregivers as medical tax write-off, can this be done if no payroll taxes are paid on them?

Asked over 5 years ago - Concord, CA

Helping my neighbor. She had to pay $140/day for caregivers (22 hrs/day) in 2008. She wants to write off this expense as a medical necessity because she needs medical help 24/7. She is over 80 and is blind. She has no personal info, and does not pay payroll taxes. She can't afford agency pay. I don't know what to tell her, she can't afford a tax accountant, etc... can you help?

Attorney answers (1)

  1. Henry Daniel Lively

    Contributor Level 20

    Answered . If the caregiver is an independent contractor she maybe ok on the payroll taxes and will just have to 1099 the caregiver. Otherwise, she should file the caregiver as a household employee, pay the employment taxes, and take the medical expense deduction.

    Disclaimer - This response does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique legal challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.

    Circular 230 Disclaimer - “Nothing in this response is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisers regarding the same.

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