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Planning for Incapacity:
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______________________________________________________________________________ Senior Care Tax Deductions for the “Sandwich Generation.” More and more adult children are becoming caregivers for their parents, often when they are still raising children or supporting young adult children in school. As the senior care expenses begin adding up, family caregivers often ask if the IRS offers a tax deduction similar to the tax deduction for child care. Question: Do I qualify for a tax deduction for taking care of my parent? They have little income and I provide more than half of his care. Answer: Yes, if you are able to claim the elderly relative as a dependent. This means you may qualify to have an additional exemption deduction on your tax return. Several factors that must be considered, including the amount of income the relative receives. Many relatives qualify for this special treatment without actually having to live with you. This includes parents, stepparents, grandparents, siblings, nieces, and nephews, and certain in-laws. Even if the relative does not live with you, you must be providing for more than half of their financial support, which includes food and transportation. So, if you and your parent meet the Internal Revenue Service's criteria, you will be able claim the relative as a dependent, giving you an extra exemption. This reduces the amount of your income that is subject to tax.
The amount of the exemption deduction you can claim depends on your income, too. The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. These levels are as follows: Married filing separately: $117,300 Single: $156,400 Head of household: $195,500 Married filing jointly: $234,600 Qualifying widow(er): $234,600 In addition, the Internal Revenue Service lets you deduct medical costs as long as they are more than 7.5 percent of your adjusted gross income. This may include the medical (and dental) expenses of everyone listed on your tax return, including your spouse and dependents. You may be able to include some of the expenses paid for a parent, along with expenses for a caregiver. Even travel expenses to and from medical treatments, along with uninsured treatments, such as hearing aids and false teeth are deductible. If more than one child participates in the financial support of the parent, some families rotate the deduction to a different child each year. Please consult your tax advisor and review the guides available from the IRS. You’ll find specifics information IRS website, www.irs.gov. You may click on the IRS publication guides to take you directly to the publications. Look at IRS Publication 501. Also see IRS Publication 502 which covers medical expense deductions, and IRS Publication 554 which covers dependent care deductions. Van Nuys Law Office PLLC is ready to work with you and your parents, to review their estate planning needs, wishes and options. We can help by making house calls to visit housebound parents, and arrange conference calls to far away loved-ones to keep them informed. We serve the greater Seattle area. We'd like to be your Seattle Wills and Trusts attorney. |
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