Thursday, February 10, 2011

Tax Help in Caring for an Aging Parent

To be eligible to claim tax exemptions for paying for mom’s doctor visits or dad’s heart check-ups, you and your parents have to meet some requirements.

Get Help From Uncle Sam in Caring for Your Aging Parent

A qualified dependent is:

* A qualified relative: children/grandchildren, brother/sister, parents/grandparents, stepsister/brother, brother/sister-in-law, daughter/son-in-law.

* A U.S. citizen or national or a resident of the United States, Canada, or Mexico.

* Someone for whom you provided over half of the financial support in 2010.

And only certain expenses can be claimed as deductions. (A full list can be found at the IRS Web site.)

* Dental treatment

* Medicare B:

As a supplemental medical insurance, premiums you paid for your parents’ Medicare B can be included in medical expenses.

* Medicare D:

As a voluntary prescription drug insurance program, you can also include premiums for Medicare D as medical expenses.

* Medicines:

Only prescribed medications can be included in medical expenses; except for insulin, you cannot include in medical expenses amounts you pay for a medication that are not prescribed.

* Transportation:

If transportation was primarily for--and essential to--medical care, transportation expenses can be included as medical expenses. For example, that can include out-of-pocket costs for transportation for your parents’ to receive medical treatments. You can also include tolls and parking fees (car insurance, general repair or maintenance are excluded).

* Special equipment:

Special equipment installed at home can be included in medical expenses if their main purpose was medical care for a dependent. For example, entrance ramps for your home, installed railing and support bars in a bathroom, and modifying stairways are all improvements that can be included in medical expenses. In the same way, wheelchair costs can also be included in medical expenses if used mainly for the relief of pain or disability (not just to provide transportation to and from work).

* Qualified long-term care:

If the main purpose of care was to assist with your dependent’s disabilities, personal care services provided can be included in medical expenses.

* Nursing home:

You can include the cost of medical care in a nursing home for your dependent if a principal reason for being there is to get medical care.

* Nursing services

You can include wages and other amounts you pay for nursing services, however, the costs of household help (even if recommended by a doctor) is not deductible.

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