Mar 8, 2011

Tax Tips for Caregivers

My friends, Zack and Linda McConnell of Approved Home Care in Dallas published a nice list of money saving ideas for tax time....

By Carole B. Larkin
Alzheimer's Reading Room

I thought these tax tips would be of interest to you. If you save money using these ideas, perhaps some of the money you save could be put towards respite for yourself.

Caring for an aging relative with a cognitive illness can result in many out-of-pocket expenses, but there are tax breaks available to help. Here are a few tips on how caregivers like you can keep more money at tax time.

  • Claim Them as a Dependent: If you provide more than half of the support for a relative, you can claim him or her as a dependent on your income tax return. For 2009, the amount of the exemption for each dependent was $3,650.
  • Deduct Fees for Help: Medical expenses incurred for a relative in a nursing home or rehab can be deducted, as long as they are your dependent. Also keep track of fees paid for in-home help such as nurses, therapists, and adult day care.
  • Itemize Medical Expenses: There are many care items you can deduct, including the cost of doctor visits, surgeries, lab work, and supplies like false teeth or wheelchairs (if not paid for completely by Medicare). If your loved one can't travel alone, you can also deduct transportation expenses like mileage, parking, tolls, and even meals and lodging if your main reason for being there is to get medical care.
  • Keep Careful Records: You can only deduct medical expenses if they exceed 7.5% of your adjusted gross income so you'll need to retain all receipts and/or documentation in order to establish that you meet the deduction requirement.
  • Use Flexible Spending Accounts: Flexible spending accounts (FSAs) allow you to put aside pretax dollars for medical expenses. Once you pay for eyeglasses, hearing aides, prescriptions,or some other medical expense,you can reimburse yourself out of your FSA.

Consult with a Tax Professional: To ensure you fully understand all the deductions to which you are entitled, talk to a tax professional.

Carole Larkin MA,CMC,CAEd,QDCS,EICS,
is a Geriatric Care Manager who specializes in helping families with Alzheimer’s and related dementias issues. She also trains caregivers in home care companies, assisted livings, memory care communities, and nursing homes in dementia specific techniques for best care of dementia sufferers. ThirdAge Services LLC, is located in Dallas, TX.

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Original content Carole Larkin, the Alzheimer's Reading Room