Gail in Virginia

So, Judy, you and Jack are saying that "companion sitters" are different than "caregivers" and that the less professionally trained "sitter" would get a 1099 because they are statutorily deemed self-employed and the position involving more responsibility and training, caregiver, would have less independence and control and get a W2?

From Reg 31.3506, the definition of "sitters" is " For purposes of this section, the term “sitters” means individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled." and according to this section of the IRC of 1954, "c) Individuals deemed self-employed. Any individual who, by reason of this section, is deemed not to be the employee of a companion sitting placement service shall be deemed to be self-employed for purposes of the tax on self-employment income (see sections 1401–1403 and the regulations thereunder in part 1 of this chapter (Income Tax Regulations))."

Schedule H also serves as the 940; complete page 2 if the employee meets the requirement to pay FUTA.

I know that this board includes some EA's, but I don't know how many of you receive the EAJournal. The September-October 2015 issue has an article entitled "Caregiver Calamities" that discusses caregiver income reporting and the liabilities that arise for domestic employees and/or caregivers. In this article, Ben A. Tallman, EA, USTCP, asks the question about whether caregivers should be paid as employees or independent contractors. In most instances, unless they work for a service that handles their employment, Mr. Tallman seems to think they should be treated as domestic employees and taxes withheld accordingly. However, Publication 15A specifically discusses "companion sitters" and states "Companion sitters who are not employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes." Reg 31.3506-1 seems to be the section under which companion sitters are statutorily removed from consideration as employees. These two positions seem contradictory. I have had clients treat the caregivers they hire for their parents both ways, although 1099MISC is far more common in this area. But I wondered if any of you have any thoughts about this issue, or have done any research that would support either position. And do IRS regulations and DOL regulations by any chance contradict each other in this area? Why can't I ever determine something once and for all and forget about it?

I don't know the rules for community property states, but if I follow the sequence of events correctly, the wife could file as single since the husband passed on in November and therefore she was not married on the last day of the year. She and the executor could elect for her to file jointly with her deceased husband, and I think that he would have to file either MFJ or MFS, but she should have the option to file either MFJ or S.

I would help but Virginia is just too far from Maine when the issues are that involved. I hope you are able to find someone helpful!

I love that Judy! Only problem I have with it is that most of the seniors that I know DO use drugs - just not for recreational purposes

I wonder how much money he saved by doing this himself without getting advice......

Catherine, I had thought I would go to the NATP forum, but my mom has an appointment that week with a specialist out of town and I chose to go with her for that instead. I would have loved to have had a chance to meet you! And I already went to the IRS forum in National Harbor, so i won't be going to Atlanta.

I know that I saw just the other day that those are the amounts that are considered as small enough that you don't need to have an 8829 re-signed if you make a change on a return. So they probably will not generate a letter. BUT if a letter is generated for any other reason, they will be added to the changes. I too, would probably correct it going forward, and otherwise ignore it unless the IRS brings it up.

Not sure I have this straight: Your client is receiving child support, but is not the custodial parent? That doesn't make sense unless it is disguised alimony. But if he is the recipient,then he doesn't pay taxes on child support, and ex cannot deduct the payments. I agree with Cathy's points, but she is reading that your client is paying the child support I think. I usually have clients paying child support who want me to treat it as alimony. Your situation is a new one on me.

I think the non-conforming part of this is not reporting income that was reported on a 1099, and the reasonable basis is that because it was a rental of less than 14 days it is not reportable income. Unfortunately, Mr. Pencil has not been seen on the forum for quite some time and cannot explain his answer personally since the question did not arise until much later.

Thanks for the information about the fully informed jury association, Catherine. That was interesting and informative!

Ouch!

Have you checked your ATX's site to see if the return has been accepted? I am assuming that you are using ATX. Every now and then I had a problem with a return being accepted but the ack never coming through to my computer. In ATX 2012, under the E-file Manager tab, under Support, under Customer Service Utilities, is an option to Synchronize E-File Info with EFC. You might try running that. Good luck!

It amazes me how often employers who hire high school and college students advise them to claim Single and 0 for the w-4 instead of exempt, or instead of suggesting that they take the form to their parent(s). I hate having to file a tax return for a kid that only has to file to get back $10 or $15 that was withheld from his or her first job. It was a big enough shock to them to lose all that money to social security withholding.

I am glad my "friends" don't post pictures of how I look at seminars on fb!

Could he be deported to the moon? Without a vacuum suit? Or maybe forced to work at prison wages until everyone gets paid back for at least the money he stole from them (I don't think he can restore their peace of mind.) Anymore, sending him to another country doesn't mean he can't do this again, it just means that it will be harder to arrest him if he does.

Actually, I got a call Tuesday on my cell phone. While I was attending the IRS Tax Forum at National Harbor. I laughed. But it really isn't funny - people fall for this every day, which is why they keep doing it.

Maybe we could get congress to do away with filing status - everyone files their own return based on their own income with no dependent exemptions or special tax rates according to filing status. If you own assets such as rental property or stocks/bank accounts jointly, you must each report 1/2 of the income. Then it won't matter whether you are married or to whom. Never happen.

I just looked at the website for your church's ASP volunteers. Wow. You guys sound so organized and I love all of the training before you go in using tools, and actually having a practice work day where you build wheelchair ramps. I don't know if this is ASP required, or something that your church does, but I think it is a great idea. Our church just usually sends a list of what to bring with you and goes, with no training for anyone until they are on site. I hope that you won't mind if I share that web page with some of our leaders - I think it is a great practice to follow!

Nice in theory, Pacun, but my husband and I have not been on the same insurance plan in years. So if we were minded to lie about our marital status, the insurance would not be what tripped us up.

I looked at the link that you provided, and I really could not find anything about itemizing deductions in that link. After chasing through some other links, I did find a power point presentation from the UN about paying US taxes that, on slide 44, tells employees that they make all efforts to minimize their tax to qualify for reimbursement, including using the larger of standard or itemized deduction. See http://www.un.org/Depts/oppba/accounts/tax/forms/us_tax_reimbursement_procedures_at_unhq.pdf

I agree with MDEA - it is usually married people telling me they are single I have a problem with but I don't know how to get someone to prove a negative. If we originally had them as married, I could ask to see their divorce papers but we had one gentleman that I did his return for 10 years filing him as single, his previous preparer had filed him as single on the return that I saw when we started with him, and then he came in and asked me to notarized some paperwork for another state because he was getting divorced. To me that is a much bigger problem.

I am curious - why do they have to itemize? I don't have any UN employees as clients, and I am not likely to, but I did not think anyone (other than MFS spouse of someone who itemizes) was required to itemize. I can see it might be advantageous.... but why required?