Itâ€™s that time again â€“ Uncle Sam is knocking on your door and ready tocollect taxes. If you have been caring for an elderly parent, you may find thatUncle Sam can actually help with some of those care costs through favorable taxtreatment. How, you ask? Depending upon your circumstances, you may be able toclaim your parent as a dependent, take a dependency care tax credit, deduct aportion of their medical expenses or get some combination of these tax breaks.
Forbes offers guidance on whether you might qualify in a recent article â€œHow To Claim Tax Breaks For Supporting Your Parents." If you think you may qualify, consultan accountant or tax professional to maximize your tax savings.
Sadly, caregiving frequently also meansmanaging end-of-life care ... and the attendant expenses. While it may bedifficult to focus on financial matters during these stressful times, taxbreaks can help extend available resources. Of course, the first step is todetermine which expenses qualify and to what extent. Expenses that frequentlyapply to people with advanced illness include health insurance premiums notpaid through work, deductibles, co-pays, medication, alternative care, medicalsupplies such as bandages, dental care, Medicare B premiums, lodging whiletraveling for care, and transportation costs. The IRS has a very detailed listof what is and isnâ€™t deductible in Publication 502. You can refer to this publication fordetails, as well as to another excellent Forbesarticle, â€œSave Money On Taxes At The End Of Life -- How AndWhy It Matters.â€
Taxescan be tricky, so make sure you ask your accountant for tax assistance if youthink you may have qualifying expenses. The tax savings will be well worth yourtime. At Idaho Estate Planning, we understandthe challenges faced by elder Americans. We have the experience and expertiseto help you maintain your options and protect yourself as well as your lovedones now and into the future. Remember, good planning is no accident.