With so many Americans living in assisted living options throughout the country, it is important that you be aware of the fact that you can save money on senior care thanks to tax deductions. If you add in the complexities of assisted living care, chances are that you want a bit more information rather than just being told “You can save some money!”
Tip! Make Sure That You Plan Ahead
The first suggestion that we can give you is not about actual tax deductions themselves – it is about making sure that you do not wait until the last moment before you go through the details of tax preparation. By keeping diligent records throughout the year, you are able to come up with some great write-offs come tax time. You will need to learn what counts as a deductible and what does not, and you have to learn how to hold onto receipts and keep excellent records.
What Counts As A Write Off?
If you want to know what qualifies as a medical expense, all you need to remember that most of the time, anything directly related to the individual’s medical care (including hearing aids, hospitals, eyewear, long-term care insurance, and Medicare insurance) counts as a write-off.
There are stipulations when it comes to the actual monthly cost of assisted living. When it comes to assisted living, it is not as easy to create a deduction as it is with say a nursing home. This is because medical care is always deductible and nursing homes are primarily used for medical care. Because this is not the case with assisted, it explains why deductibility is not always straightforward when it comes to assisted living.
Resources For Assisted Living Tax Preparation
Now it would be one thing to suggest that you have to prepare for assisted living tax preparation, and not offer you the resources to do so. These are:
- IRS.gov– Here you can find specific tax information for your unique family situation
- Assisted Living Federation of America– Here you can find specific information about the costs of assisted living.
- Alzheimer’s Association– You can find information about tax credits and tax deductions that you can get for out-of-pocket medical expenses for those who have someone struggling with Alzheimer’s living at home.
- IRS Publication 501– If you want to learn more about claiming someone with dementia as a dependent, you want this link.
- IRS Publication 502– Dental and medical expenses, here you can find a complete list of allowable expenses.