Taking care of an aging loved one can be an expensive venture, and you need to make sure your taxes are filed correctly. Various deductions and credits might end up saving you thousands of dollars if you carefully track all your caregiving expenses. Here are a few tips for family caregivers who are getting ready to file their state and federal taxes.
Throughout the year, you need to save all your financial paperwork, including bills, receipts, and bank statements. You should also start a second file specifically for any money you spend on your loved one. Another option is to install a tax app on your phone or tablet so you don’t have to keep track of paperwork. Many of these apps even allow you to file state and federal taxes directly through an online portal.
Consider hiring a professional caregiver if you need a break from your caregiving duties to plan your taxes. Coral Gables, Florida, senior care professionals can be a wonderful boon to seniors. Whether they require around-the-clock supervision or just need assistance with exercise and household tasks a few days a week, seniors can enjoy a higher quality of life with the help of trusted in-home caregivers.
Research Common Medical Deductibles
Several medical expenses that aren’t reimbursed can be deducted on your taxes, including insurance deductibles, copays, prescriptions, physical therapy, dental visits, and eye exams. If an emergency took place and your loved one was rushed to the hospital, you might be able to deduct the cost of the ambulance ride as well. Medical deductions change every year, and you need to spend a few minutes familiarizing yourself with all the new deductions before filing your taxes.
Make Sure You Qualify as a Family Caregiver
To be eligible for caregiver credits and deductions, you need to meet specific requirements. Your aging loved one must be a spouse, dependent, or qualifying relative such as a parent. It is important to remember your loved one doesn’t necessarily need to be living in your home for you to deduct some of the money you spend on him or her. Before filing, double-check all state and federal laws to see if you qualify as a caregiver.
If you need someone to provide care to your senior loved one while you tend to other important tasks, consider hiring a professional in-home caregiver. A Coral Gables caregiver can help your elderly loved one manage his or her health in a variety of ways. If your loved one needs encouragement to exercise more often, eat healthier foods, or socialize on a regular basis, an in-home caregiver can address these and many other health-related concerns.
Establish a Flexible Spending Account (FSA)
Depending on how much you earn and what type of insurance your loved one has, you might benefit from creating a flexible spending account. These accounts take money from your earnings before it is taxed and deposit it into a medical savings plan. You can then use the FSA to pay for out-of-pocket medical charges such as copays. Establishing an FSA can be a complicated process, and those who are considering opening one of these accounts should first consult a tax expert.
Consider Claiming Your Loved One as a Dependent
Claiming your loved one as a dependent could potentially save you thousands of dollars, but there are very strict rules regarding adult dependents. You must cover at least 50 percent of your loved one’s living expenses, and he or she can only earn a certain amount of taxable income every year. Your loved one must also be a citizen or permanent resident of the United States, Canada, or Mexico. If you aren’t directly related to your loved one, then he or she needs to live in your home for at least one full year before you can claim him or her as a dependent.
Caring for a senior loved one can be a challenging task, especially for family members who have to manage their own finances and taxes. Families who find it difficult to care for their aging loved ones without assistance can benefit greatly from professional respite care. Coral Gables, FL, family caregivers who need a break from their caregiving duties can turn to Home Care Assistance. Using our proprietary Balanced Care Method, our respite caregivers can encourage your loved one to eat well, exercise regularly, get plenty of mental and social stimulation, and focus on other lifestyle factors that promote longevity. To learn about our revolutionary in-home care plans, give us a call at 1 (305) 964-5636 today.