Yes! You Can Deduct Home Care Costs from Your Taxes…

April 12, 2018

 

It's fast approaching that time of year again…tax season.  We are often asked about the deductibility of home care on your federal taxes.  So we wanted to provide some key information…

 

Tip#1

 

Know How a Relative Qualifies as a "Dependent" on Your Return

 

How a relative qualifies as a "dependent" is based on two qualifications. First qualification is their yearly income. For example in 2014, their total income (not including nontaxable Social Security or disability payments) has to be less than $3,950. The second qualification was whether or not a caregiver supplied more than 50% of the relative's support. If these 2 requirements are met, you will be able to take the standard deduction for each dependent.

 

Tip #2

 

Know When You can Claim a Tax Benefit for a Dependent's Medical Expenses

 

Again, this is based on two qualifications: first, you must supply more than 50% of their support. Second, your total medical costs must represent more than 10% of your adjusted gross income. One slight difference to note is that if your dependent is 65 or older, the percentage drops from 10% to 7.5%*.

 

Tip #3

 

Know What Other Expenses You can Claim