Tax season is upon us, and if you’re helping a senior loved one with taxes, you may notice that their taxes differ slightly from yours. Retirement, social security and other tax rules and regulations often affect a senior’s taxes, so it is important to stay current on all information that is pertinent to filing for your senior loved one. Here are a few tax filing tips, presented by New Hampshire in-home care provider, Home Care Assistance.
Medical Tax Deductions
When seniors itemize their medical expenses, they may be able to deduct the amount by which their total medical expenses exceed 7.5% of their gross adjusted income. While dental and medical expenses such as prescription medications, cost of transportation to medical appointments, and home modifications like grab bars can be included deductions, click here for a full list of allowable expenses.
If your aging parent or loved one has been deemed terminally ill by a professional medical practitioner, meaning they cannot perform two or more activities of daily living (eating, bathing, toileting, continence or transferring) or is living with a cognitive condition such as dementia or Alzheimer’s, in-home care services may be deductible as well. Learn more about in-home dementia and Alzheimer’s care in New Hampshire.
Other Tax Breaks for Senior Citizens
While medical tax deductions are some of the most common tax breaks among the aging population, your loved one may be eligible for the following as well:
- Sale of Home – Whether your loved one sold his or her home to downsize or move in with you, they likely sold their home for much more than the original purchase price. If your loved one lived in the home at least two of the five years prior to selling it, they may not have to pay taxes on the equity built over the years when the home is sold.
- Contributions to Charities – Many seniors are able to relax in their retirement years, volunteering their time and sometimes financial contributions to local organizations. Seniors who donate may be able to receive a deduction at tax time.
- Retirement Programs – Contributions to a retirement program like an IRA or 401K can be done using a tax-deductible plan because investment expenses are taxed at a lower percentage rate.
Keeping ahead of the game is the first step to conquering the tax panic that comes about every year. After filing taxes for this year, start preparing for the years ahead and maintain an organized file of all paperwork including health records, changes in status, and any expenditure that may have occurred so you have everything you need for smooth and simple filing in 2016!
If you have other questions about senior home care, please don’t hesitate to reach out to Home Care Assistance of New Hampshire. We are a trusted, local provider of in-home care services with a team of highly trained caregivers and experienced Care Managers who are available twenty four hours a day, seven days a week. Call us at 603-471-3004 to request more information or a complimentary, no-obligation consultation.