Taking care of your elderly, ill, or disabled loved one is immensely rewarding. At the same time, it can also be costly. If you serve as someone’s caregiver, you may want to learn how your service can impact your taxes this year. Knowing what to claim will help you save money, so you can continue providing the quality home health care your loved one deserves.

Home Health Care & Your Tax Report

1. Claim a Dependent

You are legally allowed to claim the individual you care for as a dependent, as long as you both meet the IRS’ requirements. You don’t need to be related, but both of you must be legal residents of the U.S., Canada, or Mexico. Your loved one’s taxable income must not exceed $4,050, and you must pay for over 50% of your loved one’s annual expenses, among other stipulations.

2. Deduct Medical Expenses

If you paid for any of your loved one’s medical costs and did not receive reimbursement, and the total cost of care exceeds over 10% of your adjusted gross income, then you can make numerous healthcare-related deductions. As long as you meet the requirements, you can deduct costs related to co-pays and deductibles, therapies, prescription glasses, ambulance rides, hearing aids, home and vehicle modifications, and the cost of professional home health care in respite situations. Visit the IRS website for the complete list of deductions. 

3. Opt for Flexible Spending

As an alternative to deducting medical expenses, you may want to consider a Flexible Spending Account — FSA. FSAs allow you to use money from your salary before taxes, which is distributed into a medical savings plan. These accounts permit you to pay out of pocket with untaxed dollars on medical expenses that are not already covered by your insurance.

Knowledge is power, and it’s extremely helpful regarding medical tax claims. Whether you need respite care or tax advice, the compassionate team from CareResource Hawaii in Honolulu, HI, can help. The locally owned and operated business provides diverse services that support caregivers and those in need of home health care in the Palama community. To learn about what the home care service offers, visit the website. You can also call a friendly professional at (808) 691-4663.