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    • CommentAuthormothert
    • CommentTimeMay 13th 2013
     
    Does anyone know if I can deduct expenses for caregivers who come in to relieve me - Respite for me? And, what if the helper isn't from an agency?
    • CommentAuthorCharlotte
    • CommentTimeMay 13th 2013
     
    If you want to claim the expenses when they are independent you have to also file a 1099 if you pay them over $600. At least that is what the threshold use to be.

    Best advice is to either talk to a tax account or study the IRS guidelines. You can always email them the question, but be aware you can get different answers from each one. There are places online where you can ask tax accounts questions and get your answers - both free and usually a small fee.
    • CommentAuthorxox
    • CommentTimeMay 14th 2013
     
    First, read the IRS rules very carefully. People usually refer to the language about the loss of 2 ADLs to be eligible, but there is also language about people who cannot be left safely at home on their own and it has nothing to do with ADLs.

    Next, get a letter or script from a doctor that states your spouse needs a caregiver. This itself is not sufficient but it helps protect you if you are challenged.

    Next, consider using an accountant to prepare your tax returns. They can help you with whether the deduction is justified AND it helps protect you in case of an audit and the IRS disagrees. If the IRS disagrees on the tax deduction and you did the taxes yourself, you can be charged for back taxes, interest and fines. If you use an accountant the IRS will usually not fine you unless they believe that your lied to your accountant. I was told this by both my lawyer and accountant. I always did my own taxes until 2 years ago. I still calculate taxes and compare them to what my accountant comes up with. Turns out I made some major mistakes, well worth the money.

    You will get a tax deduction under medical deductions only if your deductions are greater than the standard deduction and if your medical expenses are over 7% (?) of your adjusted income. If you have someone come in on occasion it might not be enough.

    The helper doesn't have to be from an agency. If you hire someone directly you will have to pay employer part of Social Security and Medicare Taxes and Unemployment Insurance. Plus withhold the employee part of the taxes. The US Fed taxes makes it simple, you can pay when you file your tax return. I find that my state is much more difficult to deal with, they want quarterly filings and payments and treat me like a business. Pain in the butt, but now easy once I got it set up and a nice state civil servant helped.

    I hope the above helps. My accountant told me I was fine to take the tax deduction even though my wife hasn't lost any ADLs. In my case I have someone there all day so I can go to work. Also see if there are any programs that might provide respite care free of charge. Is your husband a veteran?