When you’re taking care of an ill loved one, the only thing you should have to think about is keeping them comfortable.
Unfortunately, medical care is expensive; one of the most expensive commodities in the United States. And the long-term care required by an Alzheimer’s diagnosis can be financially devastating.
Fortunately, there are ways to help ease the financial burden.
One of the best? Medical deductions. Much of your loved ones care is deductible on your tax return, allowing you to recoup some of the money spent on their medical care.
But how do you begin? How can you know which medical expenses are deductible and which are not? Are you at risk for audit if you take these deductions?
Let’s take a look at these and other questions as we walk you through medical deductions for Alzheimer’s care.
How Do Medical Deductions Work?
United States tax law allows medical expenses to be deducted IF they meet certain requirements.
First, medical expenses must be more than 7.5% of your gross adjusted income to qualify (that number will go up to 10% in 2019).
Second, the type of medical expense must be approved. There are several medical costs that are not approved, like non-prescription medications and some alternative therapies.
If you aren’t sure that all your medical expenses qualify, the IRS has a very handy tool you can use to make sure.
When you start thinking about your medical expenses, the obvious will probably come to mind. Doctors visits, in-home health care, prescriptions, and therapy costs. And you’re right. All of those are qualifying expenses.
But those aren’t the only qualifying expenses. The IRS definition of “qualifying medical expense” is pretty broad and may include some things that surprise you.
Let’s take a look.
Fitness is vital for those with Alzheimer’s. It can help promote emotional well-being and help raise the levels of brain chemicals that encourage mental functioning. It may not reverse Alzheimer’s, but it may help slow the deterioration process and keep those with the disease more comfortable.
If the doctor has prescribed a physical fitness regime for your loved one, you may be able to deduct the cost. This may include gym memberships, fitness equipment, or the cost of a trainer.
You’ll want to keep track of your gym contract and be aware that if it is a family membership, you may only be able to deduct the part that applies directly to your loved one.
Because it happens so late in life, Alzheimer’s can come with other health issues as well. To help treat those conditions, your doctor may prescribe or recommend specialized furniture to help keep your loved one comfortable.
This may be as simple as a reclining chair to help with reflux issues, or as complicated as actual hospital-grade beds. No matter the type, furniture can get expensive, so save your receipts and claim it on your taxes.
As with all these deductions, the key is to make sure you have a prescription or recommendation from your doctor. That recommendation is what will ensure the deductibility of the furniture.
Assisted living costs can soar into the thousands each month. And for many families, there aren’t many choices. Sometimes Alzheimer’s care can become too much, either financially, emotionally, or otherwise, for any one person to deal with on their own. In those situations, assisted living facilities can be a huge blessing.
Unfortunately, they are often an expensive blessing. The average cost of an assisted living facility in 2014 was about $3,500, and the prices aren’t going down. Luckily, assisted living costs are deductible on your taxes.
Again, it’s important to hang on to receipts and invoices for tax time and make sure you have a paper trail for everything.
Often, when a parent or other loved one is diagnosed with Alzheimer’s disease, they move in with their caregiver, usually a sibling or adult child.
But even the best houses aren’t designed for the needs that come with an Alzheimer’s diagnosis. And home renovations can add up quickly.
Luckily, this is another unexpected expense you may be able to write off on your taxes. The key is being able to prove that the renovations are medically necessary. This may mean a ramp to your front porch, or a chair lift to get between floors.
Save doctors recommendations for these improvements, as well as invoices from contractors and construction companies that may work on your home.
Shuttles to and from the hospital, gas bills for the trips to therapy, and even the occasional ambulance ride. For families of those with Alzheimer’s, these are common expenses. But they may also be deductible.
Ambulance rides are easy. Those are medical expenses. But for the others, save bills and receipts. Keep track of mileage to and from appointments if you use your own car and save your gas receipts. You may be able to write off at least part of the cost when tax time rolls around.
You will need to be careful, though. Only transportation associated directly with the medical care of the person with Alzheimer’s is deductible. So if you are squeezing mom’s therapy appointment in between Juniors soccer game and Sally’s karate tournament, you can only deduct the trip to therapy.
Find the Right Medical Expense Deductions
Dealing with an Alzheimer’s diagnosis can be frightening and stressful. Watching a family member deteriorate can be devastating. Finances should be the furthest thing from your mind. But the reality is that the costs associated with Alzheimers care may keep you up at night.
Take comfort in knowing that many of the costs can be recouped at tax time, letting you focus on taking the best care you can of your loved one. Finding the best medical deductions doesn’t have to be difficult.
For more on making sure your loved one has the best possible care, contact us today!