People often ask us, is assisted living tax deductible? And the good news is that some of your assisted living costs are tax-deductible.
As assisted living costs continue to rise each year, it is good to know that you can get a break from the taxman.
Medical expenses and including some long-term care expenses can be deductible if they are more than 7.5% of adjusted yearly gross income.
Assisted Living And Tax Deductions
For your assisted living expenses to be tax deductable the senior in the assisted living home must be considered chronically ill.
A doctor or a nurse will need to testify that the senior cannot perform at least two daily activities, this will include, getting dressed, eating, toileting, transferring from a bed or a chair, or bathing.
Or that they need help due to their cognitive impairment, this could be from dementia or Alzheimer’s, so they should be living in an assisted living home.
A licensed health provider must provide the personal care services for the services to be tax-deductible. Assisted living homes will set out the plan or the daily services that the resident will need, so you will be able to deduct them from your taxes.
What Assisted Living Expenses Are Tax Deductible?
When you want to know what assisted living expenses are tax-deductible, the general rule is that only the medical side of the care will be tax-deductible. The everyday living costs, such as room and board are not tax-deductible.
The only time when room and board can be deducted is when the senior is chronically ill, then all of the care is a certified care plan, then room and board can be considered to be tax-deductible.
If assisted living is not being used for medical care, then there is only a limited amount that can be deducted from your taxes. If you are being reimbursed by your insurance, then you will not be able to deduct them from your taxes.
When Is Assisted Living Tax Deductible?
The only tax deductions that can be taken are the portion of the expenses that are attributed to medical care, and you can also deduct the initiation fees from the assisted living home and the entrance fees. Most assisted living facilities will provide you with the information for your tax deductions.
If your parents or you’re in-laws are included on your tax returns as dependents, and live in an assisted living facility, you will be able to get tax deductions on their medical care, they must be U.S citizens or residents.
You must be paying more than half of their expenses for that tax year, and you must sign the Multiple Support Declaration form.
What Assisted Living Expenses Are Tax Deductible?
Here are a few items that you can deduct from your taxes in association with your assisted living expenses that cover your medical expenses:
1. The cost of your prescription drugs.
2. You can deduct insulin without a prescription.
3. The cost of dental work, including dentures, fillings, and x-rays.
4. The cost of travel to the medical appointments.
5. Insurance that covers medical care is deductible, and Medicaid Part B is also deductible.
6. Nursing service payments for their services can be deducted.
7. For the chronically ill the cost of long-term care, including housing, and food can all be deducted.
8. Hospital stays can be deducted.
9. The cost of medical equipment that needs to be installed in your home, or even improvements to your home for medical care can be deducted.
Conclusion For Assisted Living And Tax Deductions
Here at Loving Assisted Living, we try to give the information that will make it a little easier to understand what assisted living expenses you deduct on your taxes.
We recommend you talk with a tax professional to make sure that you are getting all of the appropriate tax deductions on your assisted living expenses.