The end of the year is coming fast. Before the celebration begins, it is a good time to think about your taxes. I know, don’t spoil your fun! But, there are savings that you can put in your pocket as a caregiver of someone with chronic disease like Alzheimer’s and you should be taking advantage of these savings. The person should be living with you, dependent on you for care or you provide more than half of their support during the year.
Tax deductions and credits are available for people who care for elders who have a chronic disease documented by a medical professional within the last 12 months. According to the IRS medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of diseases, and the costs for treatments affecting any part or function of the body. (get more info at www.irs.gov)
As a caregiver you often pay many expenses straight out of your pocket with no help from medical insurance. The cost of care is very high especially when caring for a person with dementia in your home.
Costs* you have paid this year may be eligible for tax credits (these change year to year so check it out before you file) including:
- cost of medical insurance premiums including long term care insurance
- prescriptions, doctors bills unpaid by insurance, hospital fees not covered by insurance, dental treatments
- payments made to in home caregivers for medical or nursing care
- transportation costs to receiver medical care and appointments
- in home specialized care such as physical, occupational or speech therapy
- personal care items such as diapers, briefs or special foods
- costs of facility care such as assisted living or nursing care if for medical not personal care
- aging in place in-home modifications you have made such as ramps, grab bars, stair glides, wider doors
- dentures, glasses, prosthetics, Braille books
- equipment such as oxygen supplies, wheelchair, hearing aids and batteries
(*medical costs can be deducted if they are over 7.5% of your adjusted gross income, check with your tax preparer for full details)
Don’t forget to investigate which of these costs are also deductible on your state taxes. Many states allow deductions for medical costs for caregivers in addition to your federal taxes. Remember, though, tax laws are complex and mistakes are easy to make — and may be very costly. If you are not sure if an item is deductible, check with the IRS or your own tax expert.
Happy New Year!