For those of you who wait until the last second to file your taxes, time is running out. But you aren’t just racing against the clock. Maybe you’re also trying to figure out deductions for certain medical expenses such as long-term care and assisted living expenses of loved ones. The last thing you want is to get hit with a high tax bill because you glanced over some important details. Let’s take a closer look at what you need to know when deducting medical and assisted living costs.
How Much You Can Deduct From Senior Care Services
In this article from Money, Laura Dixon explains that you must be eligible to itemize your medical expenses deductions on Form 1040, Schedule A. These must also fall under the Internal Revenue Service definition of qualified expenses. Here’s the thing: Taxpayers who are 65 or older can deduct expenses that exceed 7.5 percent of their adjusted gross income.
Deductible Medical Expenses
Be aware that tax benefits from the IRS only apply to out-of-pocket medical expenses not covered by insurance. To clarify, this means everything from preventive care and necessary treatments to surgery and dental/vision care. Cosmetic procedures, over-the-counter medications (Tylenol, for example), and vitamins are not tax deductible. So what about long-term care insurance? Well, the number of premiums you can claim depends on your age. In 2015, 60 to 70-year-olds could claim up to $3,800. The claim limit increases for those over age 70.
Rules for Deducting Senior Care Living Expenses
Here’s the short answer to our question posed at the beginning of this post: Yes, long-term care services may be tax-deductible. There is a caveat in that those who live at a senior care center only qualify for these deductions if they qualify as chronically ill and were certified as such by a licensed professional in the previous year. To clarify, ‘chronically ill’ means that a resident is unable to perform two or more daily living activities (eating, dressing, bathing) without assistance.
It’s important to know that the care provided to residents at elderly care facilities must follow prescribed plans from a licensed practitioner in order for them to be considered deductible. At The Oaks of Old Winter Park, we make the tax process easy for residents’ families. You can count on Jennifer Brown, our administrator and registered nurse, to work with your loved one’s doctor in creating a plan that outlines the daily care he or she needs. She is more than happy to provide a letter from their healthcare professional that includes this plan and how it addresses their condition.
We are proud to say that The Oaks of Old Winter Park has been a leading elder care provider for over three decades. If you’ve been considering senior care living for your mom or dad recently, we invite you to learn more about our assisted living communities.
Experience the difference of senior home care at The Oaks of Old Winter Park. Schedule a tour today.