If you care for an elderly person, you qualify for tax benefits

Uncle Sam has some tax breaks this season to ease the pressure on the so-called sandwich generation.

Demographic trends and a difficult economic situation are forcing families to band together to supply care for elderly relatives. The variety of young adults “sandwiched” in between raising young children and helping elderly parents is 23%– based on the newest study by the Pew Research Center. Another 7 to 10 million adults care for aging parents from a distance. Caregivers spend 1000’s a 12 months caring for older members of the family. The same study found that greater than a 3rd of caregivers had to provide up work, take early retirement, reduce their working hours or take time without work to care for older people themselves.

Unfortunately, many taxpayers don’t realize that tax regulations allow them to put in writing off a part of the expenses for elderly care. “Whether you provide this care yourself or employ a caregiver, you should take advantage of tax benefits, which are a real gift in these difficult economic times,” says Peter Ross, CEO of Senior Helpers, a number one provider of senior home care services.

If you’re caring for elderly parents, there are two things you can do that season to scale back your tax burden, based on Perspective Accounting Services, a tax preparation consulting firm in Raleigh, North Carolina:

Claim your parent as a dependent

Your parent’s income, excluding Social Security, have to be lower than the private exemption amount. For 2023, the private exemption was $4,700. For tax 12 months 2024, it should be $5,050. Additionally, you must provide greater than 50% of your parent’s financial support to give you the chance to assert your child as a dependent. You can claim multiple dependent parent’s status in the event that they each meet the income and support guidelines. If your parent lives with you, you can include a percentage of the mortgage and utilities.

Deduct your parent’s medical expenses

If you cover your parent’s health care expenses and pay the health care provider yourself (versus giving your parent money to cover the prices), you could also be eligible to deduct the prices – even when you cannot claim your parent as a dependent. To claim this deduction, you must provide at the least 50% of your parents’ financial support. You do not have to satisfy the income threshold. This deduction is proscribed to medical expenses that exceed 7.5% of your adjusted gross income. Nursing home costs, home health care, dental care and prescribed drugs are only among the expenses that qualify. You may additionally include your individual unreimbursed medical expenses when calculating your total costs.