QUESTION DETAIL
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I have an assistant caretaker and she is an independent contractor that I found through care.com. I was wondering if I'm able to use what I paid her as some type of deduction for when I do my taxes at the end of the year? I know I will have to report her income.
ANSWER
Expert Carlton Melton's Answer:
Whether or not you will be able to deduct the payments made to your caretaker will depend on the type of services performed by the caretaker. If the caretaker is performing nursing type services, such as giving medication or changing dressings, or bathing and grooming, then you can include the wages paid in medical expenses deducted as an itemized deduction on Schedule A.
However, if your caretaker provides nursing services, only the amount spent for nursing services is a medical expense. If your caretaker also provides personal and household services, then the amounts paid to the caretaker must be divided between the time spent performing household and personal services and the time spent for nursing services.
You can also include in medical expenses part of the amount you pay for your caretaker’s meals. You will have to divide the food expense among the people in your household to find the cost of your caretaker’s food. If you had to pay additional amounts for household upkeep because of the caretaker, you can include the extra amounts with your medical expenses. This can be extra rent or utilities you had to pay because you moved to a larger apartment to provide space for your caretaker.
You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay to your caretaker. If your caretaker also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services.
For more information see Publication 554 and Publication 926.
