When tax season arrives, it’s critical to consider deductions related to caregiver expenses. You’re spending valuable money and time caring for your loved one, so make sure that you are also making the most of your tax deductions.
As a Medicaid consulting company that assists seniors and caregivers with Medicaid-sponsored senior care, Senior Planning Services would like to share several tax write-offs that many caregivers often forget about.
Double check these common expenses to ensure that you’re not leaving money on the table:
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Almost 100% of dental and medical costs can be deducted. Anything related to the diagnosis, cure, prevention or treatment of diseases can be considered a medical cost, as can the costs for treating any part of the body. Don’t forget about over-the-counter costs, including medication and supplies that might not be covered by insurance. Keep your receipts throughout the year so that you’ll have an accurate accounting of the money spent on these important services.
Whether you have a loved one who has been placed in an assisted living community or a loved one who attends an adult day care during the day so that you can work or take care of other responsibilities, those costs are tax deductible. If you provide at least half of the support for your loved one, you qualify for deductions for these expenses. This can also include the cost of food, clothing, housing and medical care. Once again, keep track of your receipts! You should also track any payments made by your siblings or other individuals on your loved one’s behalf to ensure that you’re providing an accurate account of your expenses. Consult with a tax professional if you’re worried about making the most of these deductions.
Gas doesn’t come free. Keep a running estimate of the miles that you’ve logged for your loved one’s medical needs. Don’t forget to include transportation to hospital visits, labs, medical tests and the pharmacy. You can also count lodging expenses if you’ve had to stay overnight away from home to help cover treatment, tolls and other expenses related to transportation. Meals that you’ve paid for while staying in a hotel are also tax deductible.
Even the best insurance company doesn’t typically cover 100% of medical expenses. There are copays, deductibles and other out-of-pocket costs that add up quickly. Make sure you keep track of these important expenses and deduct them on your taxes each year. LTCI insurance premiums may also be deductible.
Have you purchased a wheelchair? What about special telephone equipment for the hearing impaired? Any durable medical equipment that has been purchased to improve accessibility for your loved one qualifies as a tax deduction. One-time expenses can be high: motorized wheelchairs, for example. In other cases, small expenses may add up drastically over the course of the year. Keep track of these expenses so that you can claim these key deductions.
For a loved one who intends to age in place, home modifications can make remaining independent possible longer than it would have otherwise. Those modifications can also be expensive! Wheelchair ramps, widened doorways and specialized equipment for the bathroom and kitchen can all add substantial expense to your loved one’s care. If these modifications don’t add value to the home, they may be tax deductible.
Caregivers often have enough trouble with money throughout the year. In many cases, they’ve left their jobs to care for loved ones or are providing a large portion of the funds to cover medical and other care expenses. That means that they can’t afford to miss out on important tax deductions that could put money back in their pockets. If you’ve paid for any of these things throughout the year, make sure that you’re claiming them on your taxes to maximize your refund or minimize your tax debt.
Benny Lamm is a communication specialist and blogger at Senior Planning Services, an industry leader in helping seniors and their families achieve Medicaid-sponsored long-term care. He enjoys playing the guitar, spending time with family and social networking.
Which caregiver tax write-offs have you overlooked? Do you have any deductions that you’d like to add to this list? Share them with us in the comments below.