Home Care Tax Deductions: Understanding New Tax Benefits for Senior Care

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Senior Care Tax Deductions

Is your senior currently receiving home care services? Will your senior be in home care services in the future? If you answered yes to either question, we want to tell you about the importance of home care tax deductions and how they can benefit for your family!

But before we do, we offer you a disclaimer: Home Care Assistance does not officially offer tax advice. We recommend that you seek the help of a professional.

The first thing we want to tell you about is the IRS.

The IRS allows family caregivers to claim individuals who are related by blood, marriage, and adoption. They even allow caregivers to claim friends who are considered dependents. As long as both parties meet the IRS’ requirements, the caregiver can claim the dependent and the credit for other dependents on his or her federal tax return.

To provide proof of adding a dependent, it is suggested to keep detailed records of any and all costs involved with taking care of your senior. At some point, you may even be required to keep a log that details all receipts and expenses to show that the dependent has lived with you for at least six months. But keeping a log is a good thing. It helps you avoid missing any allowable deductions, and it will also be a part of your documentation should you ever be audited.

As a single or married taxpayer, if your spouse does not live with you during the second half of the year, then adding a dependent who is related to you and lives with you will change your filing status to “head of household.” This means that your standard deduction will increase.

It is also important to understand the special rule for parents: You can claim your parent as a dependent and receive the head of household status – even if they do not live with you. All other relatives must live with you for at least six months for you to receive the head of household status.

Lastly, you can include deductions for the expenses incurred covering the cost your senior’s medical bills that are not reimbursable. When you go to file your yearly taxes, we suggest having a professional prepare or review your tax return before finalizing the details.

Below is a list of the allowable deductions:

  • Copays and deductibles
  • Acceptable therapies not covered by insurance
  • Eyeglasses
  • Physical therapy
  • Bandages
  • Hearing aids
  • Assisted living charges for medical reasons
  • Prescribed medicines and equipment
  • Insulin
  • Transportation to appointments or services
  • In-home health care worker, if you are working
  • Activities for older people with special needs
  • Home and vehicle modifications needed for safety or mobility

Caring for a senior can sometimes be confusing, but we hope we have cleared a few things up for you regarding home care tax deductions. Please feel free to call Home Care Assistance with any questions.


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