Most people are well-aware of the daunting costs involved with providing care to older parents or family members. However, many people involved in the process of providing this care don’t realize that there are numerous ways to recover many of these expenses in the form of tax benefits. For example, did you know that when you file your taxes you may claim deductions and credits for a range of out-of-pocket expenditures such as:
- Dental treatments
- Cost of transportation to get to a medical appointment
- Health insurance premiums
- Long-term care services
And there is more. If you are a family caregiver, you can find other creative ways to claim exemptions and other deductions. Find out more below.
Exemptions for Dependents
Many people don’t realize that dependency exemptions can also apply for older Americans under the care of family members. You may claim a dependency exemption for U.S. citizens if:
- You provide more than 50% of a person’s living costs
- The dependent is a family member or lives in your primary residence
- the dependent does not jointly file a tax return with another person
- The dependent does not have income that exceeds the current exemption amount (this amount can change annually). This scenario is quite common and can provide a tax exemption of $4000.
Tax Deductions for Medical Expenses
If you are currently paying for medical costs for a parent or relative, you can also include those with your other expenses for your personal tax deduction. In most cases, this applies whether your parent or relative qualifies as a dependent or not. These expenses can also include certain long-term care costs of an infirm individual. These savings can end up being quite significant if your costs are high.
Tax Credits for Dependents
If your parent or relative is unable to care for his or herself, you may also be eligible for a tax credit for a portion of costs that limit you or your spouse’s ability to work. This credit is only available if your family member lives with you.
These are just a few of the current tax breaks available to individuals involved with elder care. This information is provided as general information and should not be treated as professional or advice. In addition, many states have additional tax deductions or tax credits to provide financial relief to caregivers. Please consult a qualified tax and or legal advisor.
For more information check out The Impact of the New Tax Reform Bill on Seniors.