Hidden Tax Gift Families Don't Know About
Unknown Gem That Gives Tax Breaks To Americans Caring for Elderly Loved Ones
March 29, 2011 // Franchising.com // The economic downturn has made life even more of a struggle for the millions of folks caring for elderly loved ones. They're working longer hours, paying higher gas and medical bills and struggling to find the money and time to care for aging loved ones. However, this tax season, Uncle Sam gives you a gift if you're caring for an elderly loved one – a tax break many families don't even know about.
"One fourth of the families in this country are caring for elderly loved ones and they're not aware of a tax law that allows you to write-off some of the expense," says Peter Ross, CEO of Senior Helpers, a leading provider of in-home senior care. "Whether you're providing that care yourself, or you've hired a caregiver, you should take advantage of the tax breaks that are a true gift in these troubled economic times. If you don't qualify for the tax breaks, there are other ways to cut costs every family should know about."
Caring for An Elderly Loved One In Tough Economic Times
- A recent survey shows that more than 40% of caregivers are spending more than $5,000 a year caring for an elderly loved one.*
- More than a third of surveyed caregivers have been forced to quit jobs, take early retirement, reduce hours or take a leave of absence to care for an elderly loved one.*
- 40% of female caregivers say the economic downturn has made it harder for them to care for loved ones.**
*survey by caring.com **survey by Volunteers of America
TAX BREAKS FOR ELDERLY CARE
Claim your parent as a dependent
- Your parent's income, excluding Social Security, must be less than the amount of the personal exemption. For 2010, the personal exemption was $3,650. For 2011, it's $3,700. Plus, you must provide more than 50% of a parent's financial support.
- If a parent lives with you, you can include a percentage of your mortgage and utilities.
- You can claim more than one parent as a dependent if both meet the income and support tests.
Deduct your parent's medical expenses
- If you contribute to a parent's health care expenses and pay the health care provider yourself versus giving your parent the money to pay, you may qualify to deduct costs, even if you can't claim the parent as a dependent.
- To claim this deduction, you must provide at least 50% of the parent's financial support, but you don't have to meet the income test.
- Deduction is limited to medical expenses that exceed 7.5% of your adjusted gross income. Qualified expenses include the cost of a nursing home, in-home health care, dental care, and prescription drugs. You can include your own unreimbursed medical expenses when calculating total costs.
Source: Perspective Accounting Services
OTHER WAYS TO CUT COSTS IF CARING FOR AN ELDERLY LOVED ONE
- Veteran's Benefits – Veterans can earn up to $1,800 a month in VA pension money to pay for in-home care. Senior Helpers helps families find resources to get these benefits.
- Contact Your Local Area Agency on Aging to learn about government assistance programs that provide low income seniors, eligible for Medicaid, money to pay for in-home care.
"American families need to realize there is help out there to help them shoulder the burden of caring for an elderly loved one, "says Ross. "If you can't provide care yourself, hire a caregiver and research the ways you can pay for that care. It's a cheaper alternative to a nursing home and your loved ones get to stay in the comfortable surroundings of their own home. "
Tell this story with a family struggling to care for an elderly loved one. Interview senior care experts about cost saving ways to pay for care.
About Senior Helpers:
Senior Helpers connects professional caregivers with seniors who wish to live at home as opposed to a nursing or assisted living facility. The company has nearly 300 franchises in 40 states and one Canadian province offering a wide range of personal and companion care services to assist seniors living independently with a strong focus on quality of life for the client and peace of mind for their families. Senior Helpers strives to be the leading companion and personal care provider that offers dependable, consistent and affordable home care. For more information, please visit: http://www.seniorhelpers.com/