Are In-Home Care Costs Always Tax Deductible?
Most of us are aware that some tax breaks exist to offset the costs of In-Home care for a loved one. Before, claiming the deduction, make certain that your speciific costs meet the criteria.
In short, any costs associated with assistance in the "activities of daily living" or "ADLs" can be counted as a MEDICAL EXPENSES and deducted if they add up to 7.5% of an individual's adjusted gross income. How will you determine if your specific scenario meets this criteria? Ask yourself the following questions...
- Is your loved one receiving assistance with "ADLs"? These include help with bathing, dressing, toileting, eating, continence care and transferring(in/out of bed or chair). Help with errands, housework, and cooking are not qualifying activities.
- Is the care required due to chronic illness? The term "Chronically Ill" is applied to persons who are unable to perform at least 2 of the 6 activities of daily living. Additionally, someone who is cognitively impaired and requires supervision will also qualify as chronically ill. It is critical that a licensed health care provider evaluate and qualify the individual as chronically ill. This health care professional must prescribe the care and monitor the patient. No tax benefit is applied if a family arranges for care absent a physician's order.
Some careful advance planning and discussion with a qualified tax professional will allow families to take advantage of tax deductions for home care expenses.
Need assistance planning for and scheduling in-home care services for your loved one?
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