Home Care Tax Deductions: Understanding New Tax Benefits for Home Care

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Understanding home care tax deductions

Understanding home care tax deductions and their benefits is an important element for any family who has a senior enrolled in home care services (or who will be soon).

Before we begin to tell you about these deductions, we first offer you a disclaimer: Home Care Assistance does not officially offer tax advice. We recommend that you seek the help of a professional.

We will start by discussing the IRS. The IRS lets family caregivers claim individuals related by blood, marriage, or adoption – and even friends as dependents. Each party needs to meet the IRS’ requirements, and if they do, the caregiver can claim the dependent and the credit for other dependents on their federal tax return.

We highly recommend keeping detailed records of all the costs associated with caring for your senior. In some cases, this will be required of you to show proof of adding a dependent. Creating a log will also help to show that the dependent has lived with you for at least six months and will make sure you do not miss out on any allowable deductions. Additionally, this log will be a part of your official documentation if you are audited.

If your spouse has not lived with you during the second half of the year, as a single or married taxpayer, you can add a dependent who is related to you and lives with you to change your filing status to “head of household”. This will mean that your standard deduction will increase!

Let’s not forget about the special rule regarding parents. You are able to claim a parent as a dependent to receive the head of household status – even if they do not live with you. Any other relative is required to have lived with you for at least six months for you to receive the head of household status.

Finally, you can also make deductions regarding any of the expenses from covering your senior’s medical costs that are not reimbursable. We suggest having a professional prepare of review your yearly taxes before finalizing the details.

Take a look at the list of the allowable deductions below:

Copays and deductibles Acceptable therapies not covered by insurance Eyeglasses Physical therapy Bandages Hearing aids Assisted living charges for medical reasons Prescribed medicines and equipment Insulin Transportation to appointments or services In-home health care worker, if you are working Activities for older people with special needs Home and vehicle modifications needed for safety or mobility Still have questions or concerns regarding home care tax deductions or home care services? Please feel free to call Home Care Assistance to see how we can help you and your family!


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