might be able to claim your parent as a dependent, take a dependency care tax
credit, write off your mom or dad’s medical expenses or get some combination of
these tax breaks.
It’s that time again – Uncle Sam is knocking on your door and ready to
collect taxes. If you have been caring for an elderly parent, you may find that
Uncle Sam can actually help with some of those care costs through favorable tax
treatment. How, you ask? Depending upon your circumstances, you may be able to
claim your parent as a dependent, take a dependency care tax credit, deduct a
portion of their medical expenses or get some combination of these tax breaks.
Forbes offers guidance on whether you might qualify in a recent article “How To Claim Tax Breaks For Supporting Your Parents." If you think you may qualify, consult
an accountant or tax professional to maximize your tax savings.
Sadly, caregiving frequently also means
managing end-of-life care ... and the attendant expenses. While it may be
difficult to focus on financial matters during these stressful times, tax
breaks can help extend available resources. Of course, the first step is to
determine which expenses qualify and to what extent. Expenses that frequently
apply to people with advanced illness include health insurance premiums not
paid through work, deductibles, co-pays, medication, alternative care, medical
supplies such as bandages, dental care, Medicare B premiums, lodging while
traveling for care, and transportation costs. The IRS has a very detailed list
of what is and isn’t deductible in Publication 502. You can refer to this publication for
details, as well as to another excellent Forbes
article, “Save Money On Taxes At The End Of Life -- How And
Why It Matters.”
Taxes can be tricky, so make sure you ask
your accountant for tax assistance if you think you may have qualifying
expenses. The tax savings will be well worth your time.
References: Forbes (January 29, 2013)
“How To Claim Tax Breaks For Supporting Your Parents”
Forbes (February 4, 2013) “Save Money On Taxes At The End Of Life -- How And
Why It Matters”