My mother watches our daughter on a full-time basis. She refuses any payment for her services, so it should be pretty vanilla from a tax standpoint, but there are some unique aspects of our arrangement that have me thinking we could better optimize both of our tax situations.
Here's the basic facts:
- She watches our 2YO daughter at our condo on a full-time basis while my wife and I work
- She resides at a 2nd condo we purchased for her to live in during the week. She lives 2 hours away in a different state. We pay all expenses related to the 2nd condo
- She does not accept payment for her services
- She is retired, but my father is still employed.
- She incurs travel expenses to get here
- We do not claim any childcare expenses on our tax return
Does anyone have any ideas of how to optimize both of our tax situations? We've kept it rather simple to date but it feels like we could be smarter about the situation.
Thanks,
John
