Writing Off In-Home Care Expenses
Though in-home care is a much needed and valuable service, it can be quite costly. Many senior citizens and disabled individuals rely on in-home care to live a more independent life and to improve their overall quality of life. Having helpful services right in their own home is a significant benefit for many, but long-term care expenses can cost thousands of dollars each year. Even with health insurance, those expenses add up.
Can In-Home Care Be Used As A Tax Deduction?
Yes! The IRS does allow in-home care to be used as a tax deduction if certain criteria are met. If you meet certain income, relationship, and citizenship requirements, you could qualify for a hefty tax break that could help ease financial strain from piling medical expenses. The IRS rules for being eligible for a tax deduction can be confusing. Be sure to seek the assistance of a professional that can provide answers.
The IRS Publication 502 describes qualifying “medical expenses” as: costs of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part or function of the body.” (Including insurance premiums, transportation to and from medical appointments/treatment, and qualified long-term care services)
Tax Deductions For Caregivers
If you are the caregiver of a relative suffering from Dementia/Alzheimer’s, you are allowed to claim them as a dependent. This is an extra benefit for caretakers that have out of pocket expenses for medical care – those costs can be itemized and deducted. These expenses include medication, transportation, personal care items, and even home modifications to accommodate a loved one.
Talk To A Professional
When you are trying to care for a disabled individual or a senior citizen that is dependent on assistance, it can be difficult. In-home health care can help alleviate the strain on family members who want to help. This tax deduction is a significant benefit to families who are financially struggling and need the extra help. Some families could qualify for more tax deductions depending on his/her disabilities and limitations. Seeking a certified professional who understands tax laws and what is available to individuals with in-home care needs and their caretakers is the best way to find out exactly what your family qualifies for.
How Much Can I Deduct?
The IRS does have guidelines for how much of the home health care expenses can be deducted. Typically, if health insurance is covering the cost of the care, insurance premium costs can be deducted. The IRS also requires that the total cost of medical expenses for the year exceed 7.5% of the Adjusted Gross Income (for patients over the age of 65, 10% for those under 65). Publication 502 gives detailed information on itemized expenses that can be used on a tax form 1040.
If you are feeling overwhelmed because of in-home care expenses for your loved one, ask a professional about tax deductions that might be available to your family and help ease the financial burden as much as possible.