Aware Senior Care Blog

 Is In Home Care Tax Deductible?

Is In Home Care Tax Deductible?

Aware Senior Care provides knowledge from the IRS on what parts of in home care are tax deductible for 2018.

Original Publication Date: January 4th, 2017

What in home care expenses can be itemized and are tax deductible in 2018?  

It's wise to consult with a licensed CPA or tax expert, but much of this information can be found online.  If you read IRS Publication '502 Claiming a Tax Deduction for Medical and Dental Expenses' https://www.irs.gov/pub/irs-pdf/p502.pdf (published in 2017, but still applicable), you can find lots of great information on deductions and credits for in home care.

What medical expenses related to in home care are deductible?

On page 10, it provides guidance on deducting expenses for long-term care. 

In the long term care section, it says you can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. Qualified long-term care services would include what we call "personal care."


IRS specifies that personal care services can be included as a deductible medical expense if he or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.

Please review IRS publication 502 for guidelines on medical expense itemization and deductions.  Be advised IRS specifies a threshold before you can deduct medical expenses:
 

-AGI threshold.  You include all the qualified medical costs that you paid for during the year. However, you can only deduct the amount that is more than 10 percent of your adjusted gross income.


-Temporary threshold for age 65.  If you or your spouse is age 65 or older, the AGI threshold is 7.5 percent of your AGI. This exception applies through Dec. 31, 2016.

Please review IRS publication 502 for guidelines on medical expense itemization and deductions and again please consult with your CPA or tax professional.

Links to IRS Medical Expense deductions:

Claiming a Tax Deduction for Medical and Dental Expenses IRS Tax Tip 2015-31, March 4, 2015 (https://www.irs.gov/uac/claiming-a-tax-deduction-for-medical-and-dental-exp)

Publication 502, Medical and Dental Expenses (https://www.irs.gov/uac/about-publication-502).  In this publication see page 10 Long Term Care Expenses.

Tim


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