USA Tax implications of live-in in-laws

[wheelin2serve]

My mother recently joined our family. I am married with 2 young ones. My wife and I are a little intimidated by what kind of tax implications there might be if we just willy-nilly blend our finances.

Here's my mother's financial profile:
-receives Social Security Widows Benefit
-has IRA left by her father

She will increase our monthly expenses beyond what we are able to cover so, naturally, we will need to charge her for her impact on our expenses, as well as add on to our house to accommodate her (and us) in this new challenging season.

My question is how should we structure our finances to keep us from incurring an unexpected tax liability?

Signed, Michael

 

[kirby]

Bless you for bringing Mom in to the house. As for taxes, she may become a dependent (which helps your tax position) - so look up those tests and see if she qualifies. Otherwise there is not usually a "unexpected tax liability" for her joining the household. She will file her own tax return. (so - back to dependent you will have to see if her exemption is better to be claimed on her return or yours)