With the summer break approaching you are probably thinking of enlisting the help of your spouse’s parents or yours to look after the kids.
- Have them come over to our house during the day (household employee scenario)
2. Drop the kids off at their house (independent contractor scenario)
- If the grandparents are retired on social security, then earning income from work might affect their social security, or it might not be taxable at all, depending on their other sources of income.
- Because they are your parents, you don’t have to withhold or pay household employee tax (social security and medicare) on their earnings.
- If they provide care in their home, they are independent contractors/self-employed, You don’t issue any paperwork, no 1099 and no W-2. They are responsible for reporting their own income and expenses on a schedule C. (Tramadol)
- Having taxable income earned from working (earned income) after retirement has a variety of consequences that are both potentially good and potentially bad, depending on their tax situation.
All this can be explained in detail to you, visit our office today to speak to our Generational Wealth Specialist.