My family pays me a little each month to cover time and expenses to help care for my sister with dementia. Does this income need to be reported on my taxes?

[shipahoy7]

She lives in assisted living but needs me to take her to appointments buy her the things she needs, spend time with her. My brother - her poa - assists me financially to help cover my time and expenses to do this.

[Vanessa A]

It depends.  If he is just paying you to cover you gas costs and the money you spend to go to eat when you take her to her appointments, then no, this is not taxable income and does not need to be reported as it is nothing more than a reimbursement of expenses.

If he is giving it to you as a gift, or a thank you for taking care of things he doesn't have time to take care of, then this also would not be taxable income to you.

If he is paying you directly for the care of your sister, then yes, this would be taxable income.  For example, if you spend 20 hours in a month to take your sister places and he pays you $25 per hour then this would be considered taxable income and you would report it as self-employment income. 

If this is self-employment income, select the following to enter your income:

1. Federal
2. Income and Expenses
3. Show More next to Self-Employment
4. Start next to Self-Employment
5. Yes, to you have any self-employment income or expenses
6. Enter the type of self-employment work you do and you can select that you use your name for your business
7. Click through a few more screens and you will get to a screen that says "Your XX info"
8. Click Looks good
9. Then you will come to a screen that says Let's enter the income for your business.  It will give you the option of 1099-NEC or Other self-employed income including the 1099K , cash and checks.  Here is where you will enter your 1099
10. If you do not select one, it will not let you enter your income
11. Enter your self-employment income on the next screen
12. Continue and on the next screen click add expenses

* Please note navigation may differ slightly depending on which version of TurboTax you are using*

This income will be reported on Schedule C which is part of your overall tax return. This also means you will be subject to SE Tax.  If you did not pay SE Taxes in 2024, and if you plan to do this again in 2025, it may be a good idea to make  quarterly estimated payments to cover your SE taxes of 15.3% and avoid penalties.