Before you send your tax returns to the IRS, make sure you get the tax-savings you deserve. As a caregiver for a loved one with dementia, you may qualify for tax deductions and credits.
The cost of Alzheimer care is high. Because caregivers pay for most care expenses out of pocket, they may be eligible for some tax deductions.
Deductible caregiving costs may include:
Medical care, including nursing care Transportation essential to medical care In-home care, such as physical therapy Personal care items, such as disposable briefs and special foods Nursing home care Assisted living or other residential care Home modifications such as grab bars or wheel chair ramps
Well, this came after I filed. The one thing on that list that I did have was found by my tax program. My accountant never even asked me if we had substantial transportation costs. It shocked me how many miles we drove, and how much it all added up to at $0.19 a mile.
The $0.19 was what TurboTax told me it was supposed to be. I took their word for it. It ended up being more than $100 worth of deductions, and was easy to figure out once I thought it through.
Some of us aren't so efficient as others. Working on my taxes now. (Well, sheesh, I had to do them for my company first, and if you think that was easy...)
For any of you who haven't filed yet:
Per the IRS: mileage associated with medical needs is 19 cents during the first half of the year, and 27 cents during the last six months.
I get a daily email from Aging Care.com and today's topics include the tax deductions question. It contained a link to the IRS publication regarding medical expenses. Not sure if this is any help, I usually just get more confused reading all of it. I keep hoping my husband's adult day care costs are deductible but I'm not so sure. I have an accountant do our taxes, it's worth every penny for me.
Ask your accountant what you need to do to get the greatest tax deduction. At the very least I believe that you are eligible for a day care credit of maximum $5,000/year. This is the credit that can be used for day care for children. It is less stringent that the medical tax deduction. Get written letter from a doctor that the daycare is necessary for your spouse's care. If you spouse needs help with 2 ADLs that might also do it. I didn't use ADC so I have not dealt with it from a tax perspective.
Paulc, You have to be employed to get the tax deduction for day care for spouse. In the case of children, when both mother and father are in the home, BOTH have to be employed. If just the mother OR father in the home, they should file Head of Household with qualifying child and be employed to get child daycare. (I've done taxes for 37 years). Hope this helps..... Carolyn
Since I'm not working outside the home, looks like I'm out of luck as far as deductions go. I really appreciate all of your comments. Everyone here is so helpful no matter what the problem or question is. Ha, I once got some very good information here about how to get rid of fire ants.
Carolyn, I'm glad you pointed that out. I was just going to post that you can get the medical tax deduction only if your total medical expenses are high enough and even then the lower your tax bracket the less valuable the tax deduction.
That's very true, Paulc. It helps that the standard deduction is $14,600.00 (If husband and wife were both born before Jan. 2, 1949). Then the $7,800.00 for the two personal exemptions. That's $ 22,400.00 deduction without itemizing the deductions. Taxable income is wages, interest( Unless it's tax exempt interest), dividends, pensions, IRA Distributions (Unless it's ROTH) Rental, Farm and Business Income, Capital Gains. On Capital Gains, remember, if you've sold the home you lived in, chances are, none of it is going to be taxable to you. Of course, there are other things taxable. I'll be happy to answer questions for anyone regarding a particular situation. Don't know everything. Don't think anyone does. ( Also, if the total taxable income -- NOT counting social security is at or BELOW $ 32,000.00, then none of the social security is counted as taxable income).