Anna writes:
Gina,
Hello, I hope you can help me with my question. I gave up my career job to take care of my brother who is disabled and unable to care for his own needs. He is now a quadraplegic and he gets a veterans pension and a long term disability payment from when he worked. Plus he gets some social security as well.
Hello, I hope you can help me with my question. I gave up my career job to take care of my brother who is disabled and unable to care for his own needs. He is now a quadraplegic and he gets a veterans pension and a long term disability payment from when he worked. Plus he gets some social security as well.
The VA "pays" me for his bowel and bladder care at a small rate of $400 dollars a month. For this I get a 1099 and they declare me an independant contractor. I pay taxes on this amount but my real question is about our living situation and household money. My brother doesn't give me a set amount of money but all of our bills are combined and whenever i need something he gets it for me. He has plenty of money to do this and it works out well for us. I don't do this for the money anyway but am I supposed to be paying taxes on money he gives me? It seems to me it is no different than two people in a relationship together where one gives to the other. although I admit, it seems there could be a blurred line here??
I did ask this same question to another tax professional on MSN and he said I am ok because it is household money but i want to be sure. Are there specifics that would make it "not" household money? For instance, I have maintained my credit card in my name and some of the bills are in my name although the bills are always paid by my brother. This is to keep my credit up and in good standing.
We have discussed the possibility of trying to separate it out more clearly so that I could claim an actual income and get back on the "working persons grid" but have not decided what to do.
Not sure if it is important for your consideration but I live with him as well. Thank you for your feedback if you are able to consider my situation!
My reply:
Hello Anna, thanks for visiting.
You didn't say if you're living in a house or apartment. If you're living in a house, who owns it?
Assuming it's a house and your brother owns it, this is really a little bit tricky because of one point --- your brother appears to be supporting you. Because of this, you are his dependent. Does he claim you as his dependent on his tax return?
Whether or not he claims you as a dependent on his tax return, you need to indicate on your return that you may be claimed as a dependent on another return and thereby give up your own exemption. Once you give up this right and do not take your exemption, then the money your brother is paying for your household expenses is not income to you.
Best wishes,
Gina
http://GLGcpa.com
You didn't say if you're living in a house or apartment. If you're living in a house, who owns it?
Assuming it's a house and your brother owns it, this is really a little bit tricky because of one point --- your brother appears to be supporting you. Because of this, you are his dependent. Does he claim you as his dependent on his tax return?
Whether or not he claims you as a dependent on his tax return, you need to indicate on your return that you may be claimed as a dependent on another return and thereby give up your own exemption. Once you give up this right and do not take your exemption, then the money your brother is paying for your household expenses is not income to you.
Best wishes,
Gina
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