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Thread: tax deductions

  1. #1

    tax deductions

    Both of my parents have chronic health conditions that will require them to have help in the home - dad with SCI and mom with new metastatic cancer diagnosis. A social worker told us today that the money they spend for help at home for them is tax deductible - whether it is for personal care or for assistance with other general stuff (eg. cleaning, cooking, driving to doctor's appointments), because they are in need of these things because of their chronic illnesses/limitations.

    I was a little surprised to hear this, and am not convinced it is correct.

    Do you guys deduct the amount you spend on PCTs/home health assistants? Do you only deduct the time they spend on personal care?

    Thank you.

  2. #2
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    IRS publication 502/what medical expenses are included.

    http://www.irs.gov/publications/p502...link1000178989

    Here it seems perfectly clear that they are not deductible:

    Household Help.
    You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. This is a personal expense that is not deductible. However, you may be able to include certain expenses paid to a person providing nursing-type services. For more information, see Nursing Services , earlier under What Medical Expenses Are Includible. Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. For more information, see Long-Term Care , earlier under What Medical Expenses Are Includible.
    But, following the links in that paragraph, (in the same publication) I get this:

    Maintenance and personal care services.
    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment).
    So, still not clear to me on the household chores that are necessary for their health. Ie, a dirty bathroom is a health danger. Meals are necessary if they cannot cook, etc.

    BUT I do believe driving them to doctors appointments is definitely deductible, along with a mileage expense if it is their car.
    Last edited by sjean423; 03-10-2010 at 09:16 PM.
    T7-8 since Feb 2005

  3. #3
    Thank you for the links and your thoughts sjean. I think you and I had the same impressions.

    But that "maintenance and personal care services" deduction is very vague.... It is not clear to me what falls into that category.

    What is interesting is that the social worker who told us this is the primary social worker for the entire home care/home health programs for the local medical school/university hospital, and otherwise seemed to be very well informed. This is what she tells all of her clients/patients. And she also speaks from personal experience - i.e. her parent's had severe degenerative medical conditions and deducted their care/home help expenses. And they were advised to do this by their financial advisor as well (we questioned it...).

    Although, I certainly know that a lot of people get inaccurate financial advice from professionals.

    I believe nursing home expenses are deductible, if you are there because of medical necessity.... if that is true, you would think that expenses to keep you at home so you don't have to move into a nursing home should be deductible as well. But I realize things are not usually that logical.

  4. #4
    Senior Member rdf's Avatar
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    Found this: http://www.irs.gov/publications/p502...link1000178852

    Nursing Services

    You can include in medical expenses wages and other amounts you pay for nursing services.

    The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.

    Generally, only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services.

    However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. See Maintenance and personal care services under Long-Term Care, earlier.

    Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. See Publication 503, Child and Dependent Care Expenses.

    You can also include in medical expenses part of the amount you pay for that attendant's meals. Divide the food expense among the household members to find the cost of the attendant's food. Then divide that cost in the same manner as in the preceding paragraph.

    If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant.
    ----
    Disabled Dependent Care Expenses

    Some disabled dependent care expenses may qualify as either:

    • Medical expenses, or
    • Work-related expenses for purposes of taking a credit for dependent care.


    You can choose to apply them either way as long as you do not use the same expenses to claim both a credit and a medical expense deduction.
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  5. #5
    Senior Member ColonusFan's Avatar
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    Schedule R

    I have been fighting tooth and NAIL to find a CPA or Tax Professional that had a CLUE about how to qualify for "Schedule R". I spoke with an IRS official and they assured me that after working for the IRS for 16 years that he had never seen some one qualify for the Elderly or Disabled Tax credit. Now doesn't it SUCK to receive a check from the SSA and yet the IRS does not think you are not qualified to receive a disability tax credit. I do not mean to gripe about the government but when law abiding citizens are trying to do the right thing and the bureaucracy only extends the cold side of the hand where is the hope and compassion from a politician.

  6. #6
    thanks rdf

    This link was also helpful for clarifying what qualifies as someone needing "Long term care", as these paragraphs still left that vague.

    http://www.wwwebtax.com/deductions_m...care_costs.htm


    Can I deduct long term care costs on my tax return?

    You can deduct on your tax return the costs of long term care for yourself, your spouse, or your dependent if the services are required because of a chronic illness.Generally, unreimbursed expenses that exceed 7½% of Adjusted Gross Income are tax deductible on your tax return. Your total long term care costs for the tax year that you deduct on your tax return must be reduced by any reimbursement.
    The chronically ill person must have been certified within the last 12 months by a licensed health care practitioner that they are unable to perform, for a period of at least 90 days, two or more of the following activities without substantial assistance:
    eating toileting dressing bathing continence transferring Services provided by a relative are only tax deductible on your tax return if that relative is a licensed professional. The tax deduction on your tax return for a qualified long-term care insurance policy's premium is limited.
    Age Maximum Tax Deductible Premium Under 41 $320 41-50 $600 51-60 $1,190 61-70 $3,180 Over 70 $3,980 Benefits paid by qualified long term care policies:
    To the extent that they reimburse long term care expenses, benefits paid by an indemnity type contract are tax free. Benefits paid by a per diem contract are tax free up to $280 per day.

  7. #7
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    It is very unclear, and I bet if you were to call the irs and ask, you would get several different opinions.

    I think I would take the deductions, and be prepared to explain why they were needed for their health and safety, should you get called on them.
    T7-8 since Feb 2005

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