Did you know that if you are paying for part or all of your loved ones’ care, you may qualify for federal tax breaks? It’s that time of year when taxes are on everyone’s mind and if you are in charge of both your household and the support of a loved one, chances are the questions can pile up fast.
Here are answers to some of the most common tax related questions that Family Caregivers have during tax season.
Does having a dependent relative qualify for a tax return?
Yes. Having a relative as a dependent qualifies a caregiver for a tax return as long as their income is no greater than $3,900 (excluding payments received through nontaxable disability and Social Security). In order for caregivers to claim a dependent, they must have provided over 50 percent of their relative’s support in that year. If those qualifications are met, a caregiver may take a $3,900 tax exemption per dependent.
Can a caregiver claim a dependent’s medical costs for a deduction?
Yes. If you have a relative that you claim as a dependent, then you can also claim any costs you have for their medical care as long as you are providing more than 50 percent of their support and if the medical costs total are more than 10 percent of your adjusted gross income for the year. If your dependent is 65 years or older, the percentage of health care costs compared to your income is reduced from 10 percent to 7.5 percent.
Can more than one relative claim their loved one as a recipient?
No. Even if two people (siblings caring for their parents, for example) are providing care, only one is eligible to claim a relative as a dependent.
What are some things besides medical costs that are tax deductible for Family Caregivers?
Items such as clothing, food, housing, transportation and even home modifications (like safety rails or ramps) can qualify for tax deductions. According to IRS regulations caregivers are allowed to deduct costs that are not covered by a health care plan for a relative’s health care costs, including (but not limited to) hospitalization, prescription drugs, copays, ambulance service and certain long term care services. Caregivers must remember to keep a record of all expenses.
Are Family Caregivers only allowed to deduct a dependent if they are a relative?
No. Caregivers may claim a non-relative as a dependent as long as that individual was a part of the caregiver’s household for the entirety of the tax year.
We can help.
Deducting your expenses for caregiving can be a relief, and so can having a partner in the support you provide your loved one. For additional information on your rights during tax time, consult your tax professional. For support in serving as the Family Caregiver, explore the services available at Freudenthal Home Health. Contact us today to learn more.