Making The Most Out of Tax Breaks For Seniors
It’s common knowledge to accountants, but not many people know about the available tax breaks for seniors. I’m personally not a tax expert by any means. In fact, between all the cold weather, lack of adequate amounts of warm sunshine, and the looming tax return season – this is no doubt my least favorite time of year. But this will be an important year for completing my mother’s tax return; as we had to make some financial decisions regarding her ability to continue to pay for her monthly care.
So, instead of sleeping at a Holiday Inn Express and then faking my ability to write about this stuff, I found an article written by Lori Johnston, a contributing writer for Aging.com. What follows below are excerpts from her article regarding deductions and tax breaks for seniors. Hopefully you will find this information helpful.
I would recommend soliciting the expertise of a trusted accountant. This can help capitalize on as many tax deductions as possible. Read on my friends!
Which Deductions
You can deduct nearly 100 medical costs related to the diagnosis, treatment, cure or prevention of disease or costs for treating any part of the body. Those include equipment, services and supplies, ranging from glasses to eye surgery to acupuncture to prescriptions. You can also deduct expenses relating to artificial limbs, bandages, hearing aids and wigs (for others, see IRS’ Publication 502).
Long Term Care Deductions
An often-missed expense is the amount paid for long-term care services and long-term care insurance (that’s a more limited deduction, depending on age). Rehabilitation, therapeutic, preventative and personal care services are among those that qualify as long-term care services, if your family member is chronically ill and if it’s part of a plan set by a health care practitioner. Someone is considered chronically ill if they can’t perform at least two activities of daily living (such as eating, toileting, bathing and dressing) without substantial assistance from someone else.
You can also deduct gas milage. From weekly doctor’s appointments to out-of-town visits with a specialist or for a procedure, the miles you log for your parents’ medical needs can also be logged and deducted. Mary Beth Saylor, a CPA and tax principal with the Atlanta-based accounting firm Windham Brannon confirms this. She says that can take a deduction if they qualify as your dependent. Just keep a log as you’re running around.
In Home Amenities
Investing in ramps for a wheelchair-bound parent, handrails and grab bars in the bathroom or a step-less shower can be part of a deduction. It doesn’t matter if the improvements are in your home or your parents’ home. Just as long as it doesn’t add value to the house, Saylor says. The IRS says that the cost of the improvement is reduced by the increase in your property value. Other changes, such as widening doorways and hallways, lowering kitchen cabinets and installing lifts, also typically do not add value to houses.
You can also deduct interest on your or your parents’ home loans, construction loans or home equity lines of credit. There are some limitations, though, so you need to discuss with your accountant.
Of course, you may know to estimate the value of items you or your parents donate to charity. But you also can include other out-of-pocket costs related to volunteering. If you or your parents bought ingredients to make meals for the homeless or elderly, or if you drove a personal vehicle while volunteering or assisting a charity, those and other costs can be deducted.
I hope this article shed some good light on you regarding tax breaks for seniors. It’s an all too important opportunity to make the most of avenues that the government provides deduction wise. The tax breaks for seniors help ensure that your loved ones can live a less financially burdensome life.
-Rich Delong (Executive Director – The Station Exchange, Richmond Hill GA)
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Stay Healthy And Happy My Friends.