Caring for a loved one
could make you eligible for deductions and tax credits. The Internal Revenue Service≠
allows family caregivers to claim anyone related by blood,
marriage, adoption or even friends as dependents ó if both
parties meet the IRS requirements. You can claim a portion of up
to $3,000 in caregiving costs for one person and up to $6,000
for two or more. Oddly, given the name, this tax credit does not
require that your loved one qualify as your dependent under the
IRS definition of the term.
What Can I Deduct as a Caregiver?
Allowable deductions for caregivers can
include things such as eyeglasses, medical costs such as
bandages, hearing aids and prescription medication costs, as
well as money spent toward transportation to and from
appointments, modifications made to your home or vehicle for
safety needs, and adult day care or in-home care services. If
you use a flexible spending account or health savings account to
pay for these, you may not be able to also deduct expenses on
your tax return.
Speaking to a tax professional is
important when determining dependent and deduction eligibility
in any given tax year. There are many nuances within the tax
code that may fluctuate, including how various deductions
interact with each other and what you are allowed to deduct
based on how you pay for it. The IRS audits a small percentage
of tax returns, but you donít want yours to be oneóespecially if
you werenít careful during the preparation.
should be a rewarding experience, so donít make a mistake that
results in a tax bill that negatively impacts your credit.
Continue - Tips for Caregivers: What the IRS Allows (Updated
January 23, 2020 )
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