By Marlo Sollitto, AgingCare.com
Many caregivers and their elderly parents rack up thousands of dollars every year in medical expenses. Items not covered by Medicare, co-pays and deductibles, even the amount of gas used to get to doctor’s appointments.
Depending on the total amount you’ve spent, you might be able to deduct those medical expenses from your taxes. However, you have to have an awful lot of medical expenses in order to take the deduction.
There are a number of hurdles that must be overcome for a caregiver to deduct medical expenses for the person to whom the care is provided,” says Mark Luscombe, CPA, JD, LLM, and Federal Tax Analyst at CCH (cchgroup.com) and noted expert on the U.S. tax code. “The person receiving the care must meet certain support, income, relationship, citizenship and other tests.
“The medical expenses must be of the type approved by the IRS as qualifying for the medical expense deduction,” Luscombe says.
To qualify for the deduction, the total cost of your unreimbursed medical expenses must exceed 7.5% of your adjusted gross income. For example, if your adjusted gross income is $50,000, then the first $3,750 of medical expenses don’t count.
“If all the requirements can be met, the caregiver can get significant tax benefits from writing off medical expenses incurred on behalf of the person receiving care.”
So take the time to add up the amount medical expenses you (or your elderly parent) cost out-of-pocket during 2011. If its enough, you can deduct those expenses on the tax return.
What Medical Expenses Can Be Written Off on Taxes? originally appeared on AgingCare.com.