Making Caring For Aging Parents A Bit Easier
Caring for aging parents is not always an easy task.
This is especially true when taking care of another person comes with financial responsibilities such as making sure their medical needs are met.
For some this can be a real burden when you consider that nearly half of all family caregivers spend a minimum of $5,000 annually on care giving costs.
Another 25 percent spend in excess of $10,000 a year to ensure that their parents are well cared for.
Many find relief from the expense of caring for aging parents each year when filing their income tax return.
This is due to the fact that assistance is offered by the Internal Revenue Service when the individual being cared for can be claimed as a dependent.
Of course, there are some obstacles that must be dealt with first if the IRS is going to help.
The most obvious and hardest to get past is the income barrier.
It is important to figure in all of the income your parent makes and that includes interest and dividends on investments, pensions and yes, Social Security.
Although Social Security is often excluded, it is not likely that other income will be since it is considered taxable income.
Everyone has to live somewhere and you will need to figure the amount you contribute to the residential living costs of a parent you are helping care for.
They could be living in their own home, but do you regularly pay any of their bills to help them remain in familiar surroundings?
Do you pay someone else to take care of them when you cannot be there to do it yourself?
Maybe your parent is in an assisted living arrangement or nursing home.
Do you contribute to the cost of their care?
All of these add up and if you are responsible for paying all or part of this expense, you may qualify to claim them as a dependent.
Medical and Other Expenses
Once you have determined that you can claim a parent as a dependent, you can include any medical costs you have paid for out of your pocket as itemized deductions.
The IRS allows taxpayers to claim all medical costs exceeding 10 percent of the adjusted gross income.
By adding the amount spent on a parent's medical costs it is possible to meet that requirement.
Any time you are adding up the medical costs for a parent, be sure to include premiums for supplemental coverage and long-term care insurance.
Here too, these costs can be counted toward deductible medical expenses.
Dependents Care Credit
There may be another tax break available when a parent lives with you in your home and requires constant care.
This is not an expense that can be claimed as a medical deduction, but it can be claimed under the dependent care credit.
It may not be easy understanding how to get everything the IRS allows on a tax return, but the good news is that you don't have to.
Your tax accountant or tax preparer has done the study for you and can help you keep more of your money.