The cost of assisted-living (should it ever become necessary) is always a primary concern when planning for retirement. We all need to be mindful of the cost of continuing care facilities in our general locale but, in most cases; it would be preferable to stay in the comfort of our own home if at all possible.
If home care becomes a viable option one day for you or a family member, you need to be aware of some key tax considerations that apply to so-called "household employees"- such as the pesky Nanny Tax.
Based on IRS's definition, household employees also include "private nurses" or "health aides" who provide services in your home. The definition also goes on to include babysitters, cleaners, caretakers, drivers, housekeepers, maids, yard workers and of course, nannies.
How the Nanny Tax works: If a caregiver (or another household employee) is paid more than $1,700 in 2011 you are required to pay the Nanny Tax. (The threshold level will rise to $1,800 in 2012.)
This means you will need to pay and withhold Social Security and Medicare (FICA) taxes, and also pay federal unemployment taxes on each household employee. These taxes are generally paid once a year at tax time with a Schedule H form that you must attach to your tax return.
Some notable exceptions: A continuing care worker will not be considered your employee if he or she is hired through an agency and the agency has control over (a) who does the job and (b) how the job is done.
Full Article
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment