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    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #1

    Mar 7, 2017, 05:58 AM
    Is it legal
    Grandfather pays his grandson $200.00 a week using the term caretaker.
    Grandson acts as self-employed, pays his taxes. But eventually most of the funds he gets, returns back into the household account. Is this strategy legal?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Mar 7, 2017, 06:49 AM
    As long as grandfather files a 1099
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Mar 7, 2017, 09:18 PM
    Yes, it is legal. What the grandson does with the money is strictly up to him. If he wants to give it back to his grandfather, he can do so.

    As long as the taxes are paid and the Form 1099-MISC is filed, they are good to go!
    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #4

    Mar 12, 2017, 11:34 AM
    I imaging the grandfather deducts the social security and medicare from
    The grandson cash?
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #5

    Mar 12, 2017, 02:06 PM
    "Deducts social security and Medicare from The grandson cash?" For whom? You said the grandson pays his taxes.
    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #6

    Mar 12, 2017, 02:14 PM
    Oh so it's the grandson that set aside deductions. Not the payee the grandfather.
    That is okay too.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #7

    Mar 12, 2017, 03:13 PM
    Actually, the grandfather wtihholds Social Security and Medicare, then matches it dollar-for-dollar, then sends it in with the Form 941 on a quarterly basis
    pastor1189's Avatar
    pastor1189 Posts: 1,538, Reputation: 3
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    #8

    Mar 14, 2017, 05:22 AM
    Oh I see. The deductions for taxes and FICA are about $47.00. So the grandfather would match this amount and sent the total amount to the authorities
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #9

    Mar 14, 2017, 08:00 AM
    That is correct!
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