Ways to Save: Tax Deductions if You’re Caring for an Elderly Parent
The number of adult children caring for an aging parent has risen dramatically recently. Caring for an aging parent can cost you your time, patience, and usually a significant amount of financial burden.
Supporting an elderly family member can be expensive and costs continue to rise every year.
DID YOU KNOW SOME TAX DEDUCTIONS AND EXEMPTIONS MAY BE AVAILABLE?
Everyone knows parents claim their children as dependents until they become adults; however, did you know it can also work the other way around?
If you cared for an elderly parent, they may qualify as a dependent and result in additional tax benefits for you. To claim an aging parent as your dependent, you must both meet the IRS requirements:
The person must be related to you (in-laws and step-parents also are allowed). To claim a foster parent, he or she must live with you for a year as a member of your household, but otherwise, your parent doesn’t have to live with you in order for you to claim as a dependent.
Your parent must not have a gross income of more than $4,050/year. Gross income does not include Social Security or other tax-exempt income.
You must provide more than half of the support for your parent during the year. If they are living in your home, fair market rent would be considered as support. Food, clothing, medical and dental care, recreation, transportation, education, and other necessities are included as support as well. If you and other siblings collectively pay more than half of your parent’s total support and you’re paying at least 10% toward the total amount, you can still claim them.
We highly recommend discussing dependent eligibility with a trusted tax adviser because there are always nuances and changes with tax laws.
Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 10% of your adjusted gross income. (For taxpayers over 65, this will be 7.5% through 2016). These include the medical expenses for your dependents. To be included, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses.
Even if you aren’t able to claim your aging parent as a dependent, you still may be able to deduct medical expenses. The IRS allows you to itemize and deduct the amount you pay for an aging parent’s medical care when you can’t claim them as a dependent (but only when you can’t claim a parent as a dependent because of income).
Here is a complete list of allowable medical expenses you can deduct.
If you paid another person to care for your parents (while you worked or looked for work), you may be eligible to claim a dependent care credit. To be eligible you (and your spouse) must earn income during the year and be able to claim your parent as a dependent. If you qualify, you may claim up to 35% of expenses paid toward one parent’s care (up to a maximum of $3000 in expenses or $6000 if you paid dependent care expenses for both parents).
Caregiving can be costly. We hope you find these tax breaks useful!
Dr. Kay got her medical education in Brazil.
Dr. Kay also has a master degree in Film and Television from UCLA and has been an adviser for medical television shows.
Dr. Kay is very active in the Health Industry. She is a member of the American Board of Home Care, the National Association of Home Care, CAHSAH, California Association of Health Services at Home. She co-chairs the education committee for the Down with Falls Coalition. Dr. Kay is in the speaker’s bureau for the coalition helping educate health care professionals and the community on fall risks, diabetes, adverse drug reaction, dementia, Parkinson’s disease, dehydration and nutrition, etc…. for older adults.
Dr. Kay was nominated by the National Association of Women Business Owners (NAWBO) as the Remarkable Woman of 2008.
Dr. Kay is actively involved in many philanthropy and non-profit organizationssuch as the American Cancer Society, Susan G. Komen, the Philharmonic Society, Women Helping Women, Youth Employment Services, E-Women, Women Sage, Plasticos Foundation, CIELO and others.
Dr. Kay’s passion is to assist seniors to live long and thrive in the comfort of their own home.
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