Now there's a welter of tax, labor, and immigration regulations that families have to contend with. Multiple agencies want reports--and applicable taxes---on everything that goes on between two private parties---and that's just if the buyers want to pay with their own money. Medicare and Social Security rules may also apply, as well as those of long-term care and medical insurance.
Though tempting, don't ignore the complicated
tax and reporting obligations. When these oversights are discovered, the consequences can tarnish the reputations and diminish the finances of otherwise honest people.Questions that have to be answered before the caregiver starts work:
Is the caregiver an employee?It's all being done for our own protection, but why does protection have to be so (increasingly) expensive, confusing, and time-consuming?
Is the caregiver eligible to work in the U.S.?
What taxes (withholding, Social Security, Medicare, unemployment) do families have to pay?
What labor laws apply to caregiver employees?
Is written documentation required? "A final contract should be reviewed by legal counsel, not the family's CPA."