Follow
Share
This question has been closed for answers. Ask a New Question.
Find Care & Housing
https://www.irs.gov/taxtopics/tc602

https://www.aplaceformom.com/caregiver-resources/articles/is-home-care-tax-deductible

I believe in hiring somebody who knows what they are doing when you need more than a basic tax prep, at least for the first time, you can then copy that template in future returns.
Helpful Answer (1)
Report

Is this person your spouse or a parent/relative? I think this makes a difference.

I think the person you caregive needs to be a dependent, and there are clear guidelines as to who qualifies as a dependent.
Helpful Answer (0)
Report

You need an attorney. Or a CPA. Or both.
It would take hours to answer this question for you, and we are working blind.
We have no idea of what you situation is.

There is a huge difference between caring for someone in home and having "shared living expense" and on the other hand "being paid compensation for said care".
One is taxed. The other is not.
In either case you need a solid lawyer-written contract of care.
That protects you and the other person.

Of course, you could simply be asking about having taken in an elder and taking on their own costs to some %/extent. If this is the case you can either claim them as a tax deduction or not.

So in short, you need to get together you DETAILED questions, one at a time, and off you go to either elder law attorney or CPA or both. This is crucial to your own financial stability and to that of your elder. You cannot be wrong about legal and financial things without sometimes catastrophic circumstances showing up at the doorstep. There are repercussions legally for YOU and for your elder who could be denied governmental assistance in the future is they make payments to you that look like "gifting" and don't have solid contractural grounding.

I wish you the best, but one sentence questions here are no protection. We are just a group/international in fact, or folks who have done caregiving. Giving you our answers that were OK in our cases may mean nothing in your own.
I sure wish you luck. There's lots to learn in all of this. Do know that if you are the POA you have a right to solid legal help paid for by your elder.
Helpful Answer (5)
Report

If you hire a caregiver through an agency, yes. You can deduct 7% from your federal taxes. Not much, but better than nothing.

However, if you care for your loved ones, you can’t deduct. Millions of Americans are in this loophole. They pay for everything but can’t deduct a dime.
Helpful Answer (4)
Report
BarbBrooklyn Jan 28, 2024
Worried, I don't think that you are correct about "deducting 7%".

If your medical expenses (and if you have a care plan for your husband that was written by a medical professional, care is a medical expense) you can deduct the care costs if the are over 7.5 % of your income (AGI).
(9)
Report
See 4 more replies
Saralake: Pose this question to your CPA. Also, you no doubt need to retain an attorney.
Helpful Answer (0)
Report

It has to be quite a large amount, generally, but yes, and this is a question for a Licensed Accountant. You really need one in knowing what your rights are. This isn't, as Igloo, who is somewhat an expert, observes, a DIY situation.

Tax deductions can be taken for your being in care and even in ALF and MC, but it depends on the amounts. You cannot deduct your say 5,000 for apartment in ALF, but you can deduct care fees if they rise to a certain amount. And, again, this amount is within the ruling of each state for state taxes and general for federal.

Get the taxes done by an expert. It is almost always well worth the money to do so.
Helpful Answer (1)
Report

It depends. I would suggest you read IRS Pub 502 https://www.irs.gov/pub/irs-pdf/p502.pdf .

If your situation is not too complicated, Tax-Aide will complete your taxes (both federal and state) for free: https://www.aarp.org/money/taxes/aarp_taxaide/
Helpful Answer (1)
Report

This question has been closed for answers. Ask a New Question.
Ask a Question
Subscribe to
Our Newsletter