Tax Deductions for the Family Caregiver
Partners in Care
Caring for an aging loved one is one of the toughest jobs around. And rather than a paycheck, it often comes with many financial expenses.
Some relief from the costs of caregiving can be found in income tax deductions. But as with most things involving taxes, knowing what and how much can be deducted can be overwhelming.
Certified Public Accountant Mariam Ali, of ABsolute Accounting Services in Willowbrook, offers a few things for family caregivers to keep in mind come tax time.
- If your loved one lives with you full time and has an income of less than $4,000 a year, that person can be claimed as a dependent.
- Each dependent claimed on your tax return reduces your taxable income by $4,000.
- All expenses related to the dependent’s care also are deductible.
- Deductible expenses can include but are not limited to medical bills, physical therapy, mileage to doctors’ visits, modifications made to your home and care supplies such as wheelchairs, walkers and toileting products.
- Such expenses that are incurred by the dependent are deductible from the dependent’s taxable income.
- Medical expenses incurred by the caregiver as a result of providing care may be deductible.
Ali said professional caregivers might also find some relief come tax time.
Deductions for professional or non-relative caregivers include:
- fees for professional licenses
- organization dues
- journal subscriptions
- special clothing or shoes required on the job
- education expenses to maintain or improve job skills
- mileage not covered by an employer
Home Helpers caregivers incur few, if any, of these expenses. However, private caregivers should keep in mind that they are considered self-employed under the law and are required to pay Social Security and Medicare as both the employee and employer.
Self-employed caregivers also are entitled to additional deductions, including asset depreciation.
“All situations are different,” Ali said. The best way to be sure you are saving all you can is to have your taxes prepared by a professional.
To help family caregivers save all they can come tax time, Ali is offering a 10 percent discount to Home Helpers clients and employees. Just mention Home Helpers when making your tax preparation appointment.
Ali can be reached at (630) 345-5352 or via email at email@example.com.