Claiming Your Aging Parents as a Dependent: Tax Tips You Don’t Want to Miss as Caregivers
Spring is around the corner which means tax time is here. If you are like most of us, we hope the numbers will add up and there will be a check coming from the IRS for you because of over-payment of taxes.
Some of us may have missed out on certain deductibles. You may be able to claim your aging parents as your dependent. Are you breathing with a sigh of relief and at the same time not sure how to approach this issue?
Most caregivers give lots of resources to support the wellbeing of their aging relatives. You sacrifice, your time and money; sometimes you go through life with the mix of emotional turmoil as you face your days caring for your aging loved ones. Wouldn’t it be a great break if we could get some tax break for all these? Sometimes caring for aging parents can be more difficult than caring for your own young children.
There are the housing problems, medical bills, food and transportation and many more. Let’s explore to see if you can claim your aging parent as a dependent.
Diana Beam, founder of Keeping in Touch Solutions has been working with seniors and caregivers for many years. She has seen first hand the struggles that families go through. Here is a list of 5 things from Diana to help you through the process:
1. Find out your aging parent’s income including their Social Security checks for the year
2. What are the combined contributions from all your siblings per year
3. How much do you contribute to your aging parent’s living expenses (food, transportation, miscellaneous)
4. How much do you contribute to their housing costs and medical bills
5. How much time do you contribute to help them through each day which results in loss of income
These are 5 tips to help you gather your information as you work with a tax accountant that knows the tax laws.
One useful publication from the IRS you need to download is IRS-publication-501 (2011) for the latest information on Exemptions, Standard Deduction, and Filing Information.
It matters where your aging parents live when you claim them as dependent. Different considerations are given if your parents are living at their home, assisted living facilities or your home.
Take into considerations their return of investments from stocks, savings, bonds or any other source of income that you may not even know. We have emphasized the importance of having the financial conversations with your aging parents. Nothing is worse than to find out later, after your tax return is done and filed, that your elderly parents have income coming in from other sources you were not made aware of.
If you qualify to claim your aging parent as dependent, the next step is to talk to your siblings who are also contributing to your aging parent’s wellbeing. IRS has a FORM 2120 Multiple Support Declaration to ensure all siblings are in agreement and know who is claiming their aging parent as dependent. Your siblings have to sign a statement acknowledging they are not claiming tax deductions.
Here we also show you the importance of communicating with your siblings about your aging parent’s needs. The cool part is, you could claim your parents as your dependent this year and rotate with your siblings so everybody gets the benefits through the years.
For a complete list of qualified medical and dental expenses for deductions, please print out IRS Publication 502:Medical and Dental Expenses for all the details.
Keeping in Touch Solutions founder, Diana Beam knows it can be overwhelming to care for aging parents. The company was started to help others with aging family members take the first step in the issues of elder care. Just like Martin Luther King Jr.’s quote: take the first step in faith, you don’t have to see the whole staircase, just take the first step.
A daily check-in call could be the lifeline, the joy you give someone that makes the biggest difference in their perception of what old age is like.
Contact me at 317-480-1038 today. Let’s make a difference together.
I’m Diana Beam, Founder of Keeping in Touch Solutions. It is my heartfelt desire for every person to live a happy and healthy life in the place they call home, no matter what their age. You can’t put a price on peace of mind for your parents and yourself. It’s priceless . . . and significant.
For that reason, the goal of every Keeping In Touch Solutions program is to provide a caring connection and service that both the elderly and their caregivers can rely on to make living that good life easier.
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