As a caregiver, the most valuable thing you give your loved one is your time. However, caregiving often comes with many costs as well. For example, a report by the AARP showed the average family caregiver spends more than $6,900 yearly. It’s common to feel some strain from the financial needs of caregiving. To help reduce some of this stain, you may consider possible tax deductions. In some cases, you can claim your aging loved one as a dependent. Even more, you may qualify to deduct medical expenses on your return.
Can You Claim a Senior as a Dependent?
The IRS allows you to claim a parent as a dependent when you provide the majority of their financial support. Specifically, you must have paid for more than half of your parent’s support during the calendar year. In addition, the IRS requires you to meet the following:
- Your parent, if married, doesn’t file a joint return, unless your parent and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid.
- You (and your spouse if filing jointly) are not a dependent of another taxpayer.
- Your parent isn’t a qualifying child of another taxpayer.
- If your parent is your foster parent, they must have lived with you all year as a member of your household.
- Your parent is a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico.
- Your parent’s gross income for the calendar year was less than the $4,150.
If you need more help, the IRS provides an interactive guide to walk you through the criteria.
Can You Deduct Medical Expenses?
When you claim your loved one as a dependent, you may also review his or her medical costs. You should total all unreimbursed medical expenses for your loved one and every person on your return. The IRS allows you to deduct medical expenses when they exceed 10 percent of your adjusted gross income.
To use the deduction, you should itemize on your return. You should also be sure you’re including everything that qualifies as a medical expense. In addition to doctor fees, you might include prescriptions, dentist fees, medical equipment, and transportation to receive care.
Keeping Finances on Track
When it comes to tax deductions, you need to stay organized. To qualify, you should keep track of all expenses related to caregiving. Many find it helpful to store receipts in a central place. That way you aren’t gathering several things at tax time. If you have more questions, be sure to talk with a certified professional to get help.
As you review your expenses, you may decide it’s time for a change. If you’re thinking about a change to assisted living, we can help. Our senior living community staff is here to answer your questions about costs and what’s included.
Call (214)361-8923 today to learn more or schedule a tour of our senior living community.