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Tackling Tax Season
Jennifer Bradley, Staff Writer
If it's a live-in situation, a
reasonable amount of the mortgage, utilities and other
household costs will determine the level of support
To qualify as a dependent, however, a
loved one does not have to live with a caregiver. If he
or she is able to be in their own home, or in an
assisted living/nursing facility, the costs a caregiver
pays still can count toward the IRS support requirement
for a dependent.
The same sentiment applies when a
caregiver is paying for a loved one's care while they
work, whether care is being received at home or a
facility. Look at IRS Publication 503, Child and
Dependent Care Expenses to research this topic further.
For live-in caregivers, another tip to
remember is that many home modifications made
specifically for a (dependent) loved one's ability to
live in a home safely can be tax deductible. The
installation of a wheelchair ramp, widening doorways,
bathroom renovations, etc. can be considered. The amount
allowed is the cost of the modification decreased by any
increase to the value of a home.
A very common trend is for siblings to
share the financial responsibility for a parent or other
elderly family member. If a group of people is sharing
the cost burden for a loved one, the person providing
more than 50 percent of the support can claim the
A piece of advice professionals offer is
for family members to discuss the situation ahead of
time so everyone is on the same page come tax time.
If no caregiver pays that half of the
support themselves, IRS Form 2120 explains how to handle
If a caregiver has arranged for another
person to be the primary caregiver, there are tax breaks
available as well. Whether using a caregiving provider,
or independent person, these expenses can be deductible.
Any costs with helping of daily
activities such as dressing, eating, toileting, etc. can
be counted as medical expenses if they add up to 10 percent of a caregiver's adjusted gross income (7.5 percent if over 65 and older.) IRS
Publication 502: Medical and Dental Expenses explains
these in greater detail.