DID YOU KNOW that is you are paying half of your parent or parents expenses and their income meets IRS requirements, you can declare them as a dependent(s).
Even if you don’t qualify to do this you still might be eligible to deduct the contributions you made towards their medical expenses and care.
Another possible deduction comes into play when there are multiple siblings giving support for a parent. In this case, as long as a sibling provides at least 10 percent of the support and the combined support of all siblings makes up half of their parent’s annual expenses, the parent could be claimed as a dependent.
However, only one sibling can take the exemption for the parent. An agreement needs to be reached each year as to which sibling will take the exemption on their return. (Have fun with this one!)
As a family caregiver, you may be eligible for the Child and Dependent Care Credit if you paid someone else to care for your elderly parent so you were allowed the opportunity to work or look for work. If eligible, you would be allowed a credit of up to 35 percent of the expenses paid for dependent care with the maximum amount of expenses being $3,000. This means the tax credit can be worth up to $1,050.
If you are helping a loved one with their taxes, you should make sure they deduct medical expenses if the expenses are more than 7.5% of their income. This includes copays, prescriptions, medical equipment therapy and even mileage.
Be sure get help from a professional tax accountant or attorney when doing your taxes. The extra deductions will usually more than pay for this service, plus you be better protected from make costing mistakes.
The AARP has a free tax preparation service available to taxpayers with low and moderate income, with special attention to those 60 and older.
To find an AARP Foundation Tax-Aide site in your community during tax season, call the toll-free number 888-227-7669 or visit AARP.org/taxaide.
Here are some other helpful links:
- 10 things you should know about the child and dependent care act (an IRS publication)
- Tax Tips for Family Caregivers (Honkamp Krueger & Co. 2012 post which is still relevant for 2013)
- Senior Tax Credit Tips: How to Claim Caregiver Tax Deductions (“a place for mom” post)
- IRS Publication 502, Medical and Dental Expenses
Want to KNOW More About Unfrazzle?