"informally" hired relative, claim deduction?

[lmora013]

What is the name of your state (only U.S. law)? Florida

Brother-in-law and sister "hired" my mother to take care of my niece. They never filled any paperwork or paid her taxes. They only wrote "baby sitting" on the checks they gave her. When we moved to a new apartment, we had to fill an affidavit of support because the landlord did not consider those "baby sitting" checks as coming from an employer. Henceforth, the checks had the memo "support" on them. That affidavit of support was sent to the social security office as proof that my mother was not actually working--my sister was not paying her social, taxes, etc.

Now that my brother-in-law is filling out the taxes, he wants to report the money he "paid" my mom (those checks that read "baby sitting"). Will there be a problem here? S.S. has been notified that all the money is "support." The income-subsidized apartments have my mother as receiving support.

The problem I see is that there is no formal documentation that my mother was "employed" by my sister. She was not an independent contractor, they never paid her taxes like I stated. What should we do?

[LdiJ]

Originally Posted by lmora013

What is the name of your state (only U.S. law)? Florida

Brother-in-law and sister "hired" my mother to take care of my niece. They never filled any paperwork or paid her taxes. They only wrote "baby sitting" on the checks they gave her. When we moved to a new apartment, we had to fill an affidavit of support because the landlord did not consider those "baby sitting" checks as coming from an employer. Henceforth, the checks had the memo "support" on them. That affidavit of support was sent to the social security office as proof that my mother was not actually working--my sister was not paying her social, taxes, etc.

Now that my brother-in-law is filling out the taxes, he wants to report the money he "paid" my mom (those checks that read "baby sitting"). Will there be a problem here? S.S. has been notified that all the money is "support." The income-subsidized apartments have my mother as receiving support.

The problem I see is that there is no formal documentation that my mother was "employed" by my sister. She was not an independent contractor, they never paid her taxes like I stated. What should we do?

Yes, there will be a problem for both your sister and brother in law, and your mother.

According to Social Security and the income subsidized apartments he is providing support to your mother...not paying her for a service. If he now tried to deduct that money from his taxes...its a problem...for BOTH parties.

However, at the same time, if everyone had told the truth to begin with, your mother was self employed, babysitting, and should be paying taxes (particularly self employment taxes) on the income.

In any case, your brother in law needs your mother's social security number in order to be able to claim the money on his taxes. I suggest that someone explain the problems to him.

[tranquility]

Please. Stop using "words" and report what happened.

If you don't know what happened, see a tax professional. Unless you're looking to be appointed to a government post. If so, wait for the appointment and then apologize for failing to follow the tax laws.

Personally, I'd say schedule C for mother or schedule H for sister with other income or whatever credit being claimed in the alternative. However, you can follow the facts as you will.