Senior Care Tax Write Offs
Aging Matters

Most individuals want to hold on to every penny earned, so at tax time, we look for ways to deduct expenses, especially the high-cost medical bills. But Uncle Sam's tax code is extremely complicated and difficult to understand, so you need guidance.

When organizing bills during tax season, you may question whether some are legal write-offs and whether or not you should claim them. You may hesitate because you have fallen for the myths about the IRS and you see them as a big bully. The most significant fears the public shares about the government giant are the fear of an audit and the fear of going to jail. They are the ones that deter legitimate claims. But most tax experts claim less than 1% of public every experiences either. So, don't fall for the myths and forget the expenses that could significantly impact a refund. The keys to getting a rebate: don't get in a hurry and learn all you can about deductions.

To help you understand the legitimate write-offs, I asked the Seniorcare.com Aging Council to share the deductions that most seniors and family caregivers dealing with long-term care fail to report:

  • Non-medical home care is not nursing care, and it's a legitimate tax write-off as a "medical expense." Laurie Miller, Apple Care Companion
  • If you've met with an estate planning attorney last year, some legal fees are allowable as a deduction. We believe that close to twenty percent of the costs paid to the firm is legal tax advice. Evan Farr, Farr Law Firm
  • Since every state is different, refer to your family tax preparer. Always maintain a record book of costs when caring for someone. That means dates/time, receipts, and everything you spend. Scot Cheben, CaregivingAnswers.com
  • Veterans qualify for certain tax deductions. For everyone else, there is a "7.5% rule." If your elderly parent hires you as a formal caregiver, the aging relative can claim an itemized deduction for the services as a medical expense that exceed 7.5 percent of adjusted gross income. Michelle Jeong, LifeAssist
  • At-home personal care is an IRS tax write-off if the individual is "chronically ill." The nurse or a physician must verify that the person requires the assistance or has a cognitive impairment. Patricia Grace, Home Helpers
  • Track and log expenses: Mileage, parking, tolls, and lodging for your dependent's medical needs, home adjustments and modifications, medical equipment, family caregiver financial support in some situations, long-term care services, co-pays, deductibles, and other out-of-pocket costs not covered by health insurance. Ben Mandelbaum, Senior-Planning.com
  • Every situation differs. Check with the IRS or read "Table 3-1 in Chapter 3 of Publication 17, Your Federal Income Tax for Individuals. The document gives an overview of the claim exemptions for a dependent. Kaye Swain, SandwichINK
  • Check with tax accountants on the dependent tax credits for your state. Some family members can claim older relatives in certain situations but know the rules are stringent. Also, you may apply your "employee" flex spending account for a care recipient's needs. But in most cases, hire a reliable CPA to help guide you through the options. Alex Chamberlain, Easy Living FL

Carol Marak is the editor at SeniorCare.com. She's earned a Certificate in the Fundamentals of Gerontology from the University of CA, Davis. Contact Carol at Carol@SeniorCare.com.



Part of the Aging Matters Weekly Syndicated Column

Aging Matters is a weekly column tackling everyday challenges that our growing elderly population and their loved ones face. It is also published in a variety of syndication partners including newspapers all over the country.

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