Question
If my 8 aunts and uncles want to pay one of my cousins monthly to provide companionship/basic care for my grandma, what would be the tax implications for all parties?
Would my cousin be considered an independent contractor or an employee? She would not have a fixed schedule, just visit her every day, check her blood pressure, make sure she takes her meds, etc. If each aunt/uncle would pay my cousin $50/month x 12 months=$600/year from each so that means she wouldn't have to get a 1099 from any of them if she was an independent contractor?
Also, read this from IRS: https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-tax and sounds like since my cousin is not in the business of providing care to other elderly people, only specifically to our grandma, she wouldn't have to pay self-employment tax. Is that correct?
We're not sure if she'd be an employee (and who would be the employer?) or if she's an independent contractor.
So what would be the tax implications for my cousin (she would have $4,800/year income for this) and would there be any tax implications for my aunts and uncles who are paying her? Would my cousin just report this as Other Income? Thanks in advance for your help!
Also, read this from IRS: https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-tax and sounds like since my cousin is not in the business of providing care to other elderly people, only specifically to our grandma, she wouldn't have to pay self-employment tax. Is that correct?
We're not sure if she'd be an employee (and who would be the employer?) or if she's an independent contractor.
So what would be the tax implications for my cousin (she would have $4,800/year income for this) and would there be any tax implications for my aunts and uncles who are paying her? Would my cousin just report this as Other Income? Thanks in advance for your help!
