Posted on March 28, 2012
With the tax deadline looming, be sure to include all deductible costs you pay for senior care on your returns. Whether your loved one is in assisted living facility or using in-home care services, you may qualify for deductions and credits for the associated costs of their care.
Here are some key tax points to consider:
1.Claiming your parent as a dependent. You must be paying more than half the cost of your parent’s care. If qualified, there’s a reduction of your taxable income. Your parent does not have to live with you. But to qualify, your parent’s annual income must be less than $3,700. See IRS Publication 501: Exemptions, Standard Deduction, and Filing Information for more details.
2.Claiming modifications to your home. You may claim a medical expense for modifications made to your home in order to accommodate their medical needs. However, your parent must have been your dependent at the time (either expenses were paid or medical services were rendered). Be sure to consult your tax professional as other rules apply to claiming modifications as a medical expense.
3.Deducting the costs for medical expenses. If you are able to claim your parent as a dependent, then the IRS may allow you to claim a deduction of your parent’s medical expenses. The expenses for your parent’s medical care must exceed 7.5 percent of your adjusted gross income to qualify.
4.Deducting the costs for assisted living or in-home care. For your parents to qualify for tax considerations, a licensed health care practitioner must have formally determined during the last 12 months that your dependents are unable to care for themselves. It’s important to meet with a tax preparer to go over all of the requirements of deductions associated with your parent’s care. Remember, in each case, you must provide adequate documentation for the IRS to qualify. Taking care of your parents can be challenging. Knowing that you can ease your own burden come tax time makes it easier to opt for the right level of care for the ones you love.
Submitted by Gabriela F. Brown, CSAby