my mother lived in my home and paid me to take care of her do i have to pay taxes on this?

Answer 1

If you share household expenses with a roommate, you don't consider their share as income. Your mothers payments were for part of her share of household expenses, weren't they? This could be a 'gray area', but I doubt the IRS would question as long as YOU provide most of the cost of maintaining the home.

Answer 2

Technically, if you are earning income, you have to report it. There is a special tax schedule, "Schedule H", specifically designed for household workers. It is rather involved, as if your mother is paying you, she is also supposed to pay social security tax for you as a worker. Or...you could choose to report the income as "Business income" like as a contractor--using "Schedule C". This is probably less accurate. If you are treating her income as like a rent payment, you could treat it on "schedule E"--this would make the most sense if your mother was living in a separate part of the house, so you could treat it as a separate apartment, and then deduct the costs for that part of the house.

In your case, since your mother is family, it may be more realistic to treat her payments to you as a gift. The legal cutoff for allowable gift payments is $11,000K. If you are below this amount and treat the payment as a gift, then it is non-taxable. However, any amount above this that is given as a gift is taxable and must be reported.

In addition to requirements about what is strictly legal, you need to think in practical terms--is the IRS going to catch you if you're doing something wrong? Are they even going to notice anything at all?

The IRS is very thorough but there are some things that they won't catch. If your mother is paying you upwards of $20K annually, and it is your main source of income, I would say there is a reasonable chance that they may catch you in this activity. However if she's paying you under $11K annually (which could be considered a non-taxable gift) and you have other main sources of income, then there is no way they would ever find out.

Whatever you do...if you ever get a letter from the IRS saying that you did something wrong, you should comply with it. Usually they understand that most people are well-intentioned, and if it's clear to them that you were simply confused about how to report something, they will just make you pay whatever tax you owe and that will be the end of the story, no huge fines or anything.

Answer 3

No she is paying you for her living expenses, room, board, transportation, that is not income to you.