March 4, 2019
Serving as a caregiver to an aging loved one takes not only time but also money. It’s very common for adult children to provide financial support for mom or dad. In fact, caregivers spend nearly $7,000 a year on average, according to a report by the AARP.
While caregiving may cause some financial strain, you may also qualify for some tax deductions. Two common tax areas you may consider are claiming your loved one as a dependent and deducting medical expenses.
Do you provide the majority of financial support for your parent? You may be able to claim him or her as a dependent. According to the IRS, you must provide more than half of your parent’s support for the calendar year. You should also meet the following criteria:
If you’re still unsure, the IRS also provides an interactive assistant to walk you through the questions.
If you claim your parent as a dependent, consider your spending on medical expenses. You can deduct unreimbursed medical expenses if they total 10 percent or more of your adjusted gross income. This total includes medical expenses for everyone on your filing.
For example, you could include health insurance premiums, copays, out-of-pocket therapy costs, dental expenses, or some long-term care expenses. To take this deduction, you must itemize on your return.
While finances and taxes can cause stress, it’s easier if you stay organized all year long. Find a way that works for you to track caregiver expenses and stick to it. You may create a special file or spreadsheet so it’s all in one place. Even more, talk to a tax professional if you have questions or need help totaling costs. They are the best resource for ensuring you file correctly.
Finances are a common concern for caregivers. As you review your financial situation this year, you may see a need for a change. If you’re considering a move to assisted living, we can help answer your questions. We’d love to hear from you.
Call (972) 726-7575 today to learn more or schedule a virtual tour of our senior living community.