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AGING MATTERS: Legitimate tax write-offs for eldercare and caregiving

The Kentucky Standard - 3/29/2017

It was almost a year ago today that Aging Matters discussed tax help for senior care and family caregivers. I'm circling back in case readers missed or forgot the ones mentioned last season.

When involved in helping a family member, you might qualify for tax write-offs. Don't shy away from them because you fear an audit; experts say less that 1 percent of the public experiences a review. A list of claims:

Dependents. Are you paying more than 50 percent of a loved one's living costs such as food, medical care, housing, transportation, equipment and utility bills? Is their 2016 gross income (excluding Social Security) below $4,050? Then you can claim the loved one as a dependent on your tax return. It will reduce your taxable income by $4,050, even if the dependent does not live with you, as long as his income falls below $4,050 and you provide more than half his financial support. But if your loved does live with you, then you can deduct a percentage of your mortgage, utilities and other expenses contributed to his care and support.

Shared financial assistance. Do you share financial help with another family member? If so, you may be eligible for the multiple support declaration. If you pay more than half a loved one's expenses, you can claim the dependent. And if a sibling provides less than half, but their combined assistance exceeds half the loved one's support, the sibling giving more than 10 percent can claim the dependent. But only one person can apply for the tax break in a particular year. Each person can rotate, just complete and file IRS Form 2120.

Medical claims. You can get a tax break for paying some of the medical expenses. The IRS allows taxpayers to deduct money spent on a person's health care and qualified long-term care services. To claim the deduction, you must provide more than half a loved one's support, but they do not have to meet the $4,050 limit income test. And expenses limit to medical, dental and long-term care that exceed 10 percent (or 7.5 percent if you're 65 by Dec. 31, 2016) of your adjusted gross income.

Home care credit. Do you pay for in-home care or adult day care? You may qualify for the Dependent Care Tax Credit. The credit can cut up to $1,050 off your tax bill for the year. Fill out Form 2441 and file with your return.

Other tax deductions: If you met with an estate planning attorney in 2016, some legal fees are allowable as a deduction. We believe that close to 20 percent of the costs paid to the firm is legal tax advice.

Track and log expenses: Mileage, parking, tolls and lodging for a dependent's medical needs, home adjustments and modifications, medical equipment, family caregiver financial support in some situations, long-term care services, co-pays, deductibles and other out-of-pocket costs not covered by health insurance.

Carol Marak, is an aging advocate, and editor at Seniorcare.com. She has a Certificate in the Fundamentals of Gerontology from UC Davis, School of Gerontology.

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