Family Is This Tax Deductible? Caring for a Loved One Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Nov 3, 2014 - [Updated Mar 28, 2024] 3 min read Reviewed by Lena Hanna, CPA Being a family caregiver can be lonely sometimes, but know that you are not alone. There are 53 million people in the U.S. who provide caregiving to an adult family member or friend. Caregiving can not only be time-consuming but also expensive. Costs of medical expenses,therapy, co-pays,deductibles, and transportation to get to doctor’s appointments add up quickly. And if your loved one is one of the million seniors residing in 31,000 assisted living facilities across the country, the costs are even greater. Thankfully, expenses you incur to care for your loved one may be tax deductible if they qualify as your dependent and you itemize your deductions on Schedule A, rather than taking the standard deduction. In order for your loved one to qualify as your dependent, they must meet certain qualifications and the medical expenses incurred must meet IRS standards to qualify for the medical expense deduction. Typical deductible medical costs include prescription drugs, doctor and hospital costs, medical supplies, dental and eye exams and treatments, transportation to get to medical appointments, and health insurance premiums including Medicare Part B that is deducted from Social Security payments. Long-term care is also deductible if your loved one is in a facility primarily to receive nursing care. If your loved one is in a facility primarily for custodial care, then only the costs related to medicalcare is deductible. Deductibility floor. If medical expenses incurred to care for your loved ones qualify, the total unreimbursed medical expenses you paid have to be greater than 7.5% of your adjusted gross income for the year. Residency rules. To qualify as a dependent, the person you are caring for must be a United States citizen or resident of the U.S., Canada, or Mexico. Relationship tests. You can claim tax deductions and exemptions if your loved one is a spouse, dependent child,step-child, parent ,stepparent, aunt, uncle, niece, nephew, father-in-law, mother-in-law, daughter-in-law, brother-in-law, or sister-in-law. If they don’t fall into one of those categories, they must have lived with you for the entireyear. Dependency deduction. You may claim your loved one as a dependent on your tax return if you pay for more than 50% of their support, they don’t have income over $4,700 for the year, they don’t file a joint tax return with a spouse, and are not claimed by anyone else. Record-keeping. If you benefit from itemizing your deductions and can claim your medical expenses, you must be able to show that you incurred the expense. It is important to keep receipts or other proof of payment, and this proof must include information that shows what and who the payment was made for. Don’t worry about figuring out whether you can claim your loved ones as a dependent and whether the medical costs incurred qualify as a deduction for you. TurboTax will guide you through simple questions and determine the tax deductions and credits you’re eligible for, making it one less thing you have to worry about. Get started Previous Post Ready, Set, Go! 2015 Marketplace Open Enrollment Begins November 15 Next Post Health Care, Taxes, and You: If I can’t afford health… Written by Ginita Wall More from Ginita Wall One response to “Is This Tax Deductible? Caring for a Loved One” I am a caretaker but more importent my credit unions new website does not allow transactions and categories anymore. – hope I can find a credit union that does for taxes. Also is there something available in preparation for 2015 re: worksheets etc. I thought I saw it. Thanks. Reply Leave a ReplyCancel reply Browse Related Articles Family Is This Tax Deductible? Care-taking for a Parent Life What Medical Expenses are Tax Deductible? Tax Deductions and Credits Are Medical Expenses Tax Deductible? Family Are Overnight Camps Tax Deductible? Tax Tips Medical Expense Deductions – What’s Tax Ded… Family Eight Tax Benefits for Parents Tax Deductions and Credits Tax Considerations for Cancer Patients Tax Tips Is There a Pet Tax Credit? Tax Deductions and Credits 10 Commonly Overlooked Tax Deductions and Credits Taxes 101 Tax Write-Offs & Deductions Explained
I am a caretaker but more importent my credit unions new website does not allow transactions and categories anymore. – hope I can find a credit union that does for taxes. Also is there something available in preparation for 2015 re: worksheets etc. I thought I saw it. Thanks. Reply