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there are plenty of people who like the idea of a personal services contract as a way of painting a family caregiver and simultaneously being a nice strategy for getting money out of the Medicaid applicants name so what they dont like about this strategy is the tax consequences right the income tax consequences so the caregiver group receiving this lump sum payment and often I get the question is there anything to do about that can you avoid paying taxes one of the first things I say is Im not a tax attorney Im not a CPA and if your accountant has some way of determining if this is not a taxable event I defer to to their advice generally speaking about my understanding is if you receive money for services that you render to somebody else that is a taxable event and one surefire way I know of not eliminating income taxes but deferring the income taxes is utilizing an annuity and there are companies that I work with that will for free take the lump sum and instead up so instead of abo