As with almost all things involving tax, this question is not simple because the law requires an evaluation of the facts and circumstances surrounding the family/caregiver relationship. The first question that must be answered is whether the caregiver is an 'employee.' The answer to this question will govern the reporting requirements for the caregiver. To help make the process of hiring a caregiver less burdensome, this article answers the tax and nontax questions that come up when a family hires someone to help in the home. When these oversights are discovered, the consequences can tarnish the reputations and diminish the finances of otherwise honest people.

Amid dealing with the emotional and financial aspects of this task, many families overlook the tax and reporting obligations. Department of Labor (DOL), Occupational Outlook Handbook, 2016-17 Edition, Home Health Aides. Bureau of Labor Statistics (BLS) projects a 38% increase in employment in the home health and personal care sector in the coming decade (BLS, U.S. As Baby Boomers continue to age and require more assistance, this need will likely grow. To manage these competing demands, many people are hiring in- home caregivers to help care for family members. These individuals face considerable pressure to balance the need to care for a multigenerational family with the obligation to earn a decent living.

About half of all American adults in their 40s and 50s are part of the 'sandwich generation' they have at least one parent who is 65 or older, and they're also raising a young child or financially supporting a grown child (Pew Research Center, ' The Sandwich Generation: Rising Financial Burdens for Middle- Aged Americans').

2016 extension form for 1040