Taxes are one of the realities of our world. No one really likes paying taxes, but it’s something that undisputedly helps society–when a fair and just government is overseeing finances. For the last 200 or so years, taxes have been applied in a variety of ways in our country and although they haven’t been used perfectly, they have helped the country grow.
Being a family caregiver can be a grind, and taxes can exacerbate things. However, family caregivers might have a few things to their advantage this coming tax season, especially if certain guidelines and eligibility requirements are met.
Tax breaks are not typically the first thing that come to your mind when you’re providing care for an older loved one. However, the money that can potentially be saved this way can help to relieve stress and even help you to provide better care for the people that you love.
One of the first things to think about is whether or not you can claim an elderly loved one as a dependent. For this to happen, that individual needs to be related to you, either biologically or through marriage. Also, their income levels must be low enough to qualify. For 2018, that number stood at $4,150, but it does change from year to year. Additionally, you must be responsible for more than half of the care that is being provided. Some states–including California–have extra tax credits that come with providing care for a dependent.
Dependent care credits can also be used if you paid for help with senior care. Again, how much you can claim here will vary from state to state, but it can be a helpful way to offset your tax burden, or even help you to get a tax return at the end of the year. The catch with this credit is that you or your spouse must earn money during the course of the year. If you’re retired and caring for a spouse, this one will not be helpful. Ask a tax professional for more information on how this can be applied.
Medical expenses can also be deducted–even if your elderly loved one isn’t being claimed as a dependent. Again, this is an area where guidance from a professional can be helpful, but the general rule is that this claim can be made if 7.5 percent or more of your claimed income goes toward medical expenses. When it comes to care, some hit a much higher percentage than this.
We’re not tax professionals here at Paradise In-Home Care. The goal of this article was not to give you tax advice, but to educate you about certain benefits that you might be able to use to your advantage. If you have questions or want to learn more about taking advantage of these things when doing your taxes this year, make sure that you speak with a certified tax professional. They will be able to point you in the right direction and help you save the money that you are entitled to.
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