senior care tax deductions

Senior Care Tax Deductions: Understanding New Tax Benefits for Senior Care

Do you and your family currently have a senior receiving senior care services? Will you be soon?

If so, it’s going to be important to learn how home care tax deductions work to your family’s benefit!

Before we begin, we want to mention that Home Care Assistance does not officially offer tax advice. We recommend that you seek the help of a professional.

Now, let’s get started learning about how this works.

The first thing to know is that the IRS allows family caregivers to claim individuals related by blood, marriage, or adoption. They even allow them to claim friends as dependents. Both parties are required to meet the IRS requirements. Once they do, the caregiver can then claim the dependent and the credit for other dependents on their federal tax return.

In order to provide proof of a dependent, it is crucial to keep detailed of all expenses associated with caring for your senior. Sometimes, a detailed log is required to show that the dependent lived with you for at least six months. This log will include keeping track of all receipts and noting all related expenses. Maintaining the log will ensure that you don’t miss any potential deductions as well, and it will be added to your documentation if you should ever be audited.

For single or married taxpayers that do not live with their spouse during the second half of the year, adding a dependent who is related to you and lives with you will change your filing status to “head of household”. This change in status will mean your standard deduction will increase.

It’s also important to understand the special rule for parents. You can claim your parent as a dependent and receive the head of household status even though he or she does not live with you. Any other relatives must live with you for a minimum of six months to receive the head of household status.

Furthermore, deductions can be made for any expenses paid to cover your loved one’s medical costs that are not reimbursable. When filing your yearly taxes, we suggest having a professional prepare or review your tax return before finalizing the details.

Read below to learn some of the allowable deductions:

  • Copays and deductibles
  • Acceptable therapies not covered by insurance
  • Eyeglasses
  • Physical therapy
  • Bandages
  • Hearing aids
  • Assisted living charges for medical reasons
  • Prescribed medicines and equipment
  • Insulin
  • Transportation to appointments or services
  • In-home health care worker, if you are working
  • Activities for older people with special needs
  • Home and vehicle modifications needed for safety or mobility

We understand that caring for a senior loved one can be overwhelming. However, understanding all of the available benefits and tax breaks will help ease some of the financial burdens families often incur. If Home Care Assistance can be of further help, please give us a call.