@olekingcole001 wrote:
Sorry, my explanation wasn’t super clear. She lived with us full-time, so our home was also her home. Not sure how we should classify it, but I would assume we could go with whichever route is most beneficial, which is probably paying her on W-2 as a nanny, and avoid the nanny tax since she’s my mother.
In that situation, I would treat her as a household employee (nanny) and give her a W-2. This is similar to being an au pair, where the caregiver lives in the family's home. Another reason for this is that if she was treated as self-employed, she could not deduct household expenses against the business income because she doesn't own the home.
