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Susan B. Geffen
The Elder Care Guru's Monthly Newsletter
In this newsletter: * How to write off the cost of
long term care on your taxes
* Failing to plan ahead can lead to elder abuse
* Statins for the brain may protect against Alzheimer's
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How to write off the cost of long term care on your taxes
For Adult Children, Seniors and Caregivers
It is that time of year again. The time when we say "I would rather do silly things like "eat a bar of soap" (and wash it down with water) instead of writing that check to the IRS.
Me, I just think about moving to another country, like Nevada! However, for those of you who have paid for long term care or a loved one's long term care, there is some tax relief!
This is important tax relief information. You must resist the urge to yawn (or vomit).
Qualified long-term care expenses can be tax-deductible as an unreimbursed medical expense on Schedule A if they are for diagnostic, preventive, treatment or rehabilitative services, or for personal care required by someone who is chronically ill. The services must be prescribed by a licensed health-care practitioner. Long-term care services and other unreimbursed medical expenses must exceed 7.5% of the taxpayer's adjusted gross income.
The term chronically ill refers to seniors who are unable to perform two or more activities of daily living" (eating, transferring, bathing, dressing and continence) without assistance, or who need constant supervision because of a "severe cognitive impairment" such as Alzheimer's disease or related dementias. If you are a resident of an assisted living facility, you must have been certified within the previous 12 months as chronically ill by a licensed health care practitioner.
In order to qualify for a deduction, personal care services must be provided pursuant to a plan of care prescribed by a licensed health care practitioner. Many assisted living communities have on staff a licensed nurse or social worker who prepares a plan of care which is a coordinated effort with the resident's physician which outlines the specific daily services the resident will receive in the community.
In order to take advantage of deductions, a taxpayer must be entitled to itemize his or her deductions. Typically, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not. However, if the resident is chronically ill and in the facility primarily for medical care and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital.
As adult children caregivers or financial underwriters of your parents care, you can deduct the medical care expenses (not reimbursed by insurance) of your parent if you provide more than 50% of your parent's support costs. If your parent is suffering from dementia he or she may be considered your dependent for tax purposes and you may be allowed to itemize his or her medical costs.
Additionally, you might also be able to use your own workplace flexible spending account (FSA) to pay for out-of-pocket medical expenses and dependent care expenses with pretax dollars, for a potential savings of about 20 to 30 percent.
Additionally, if you paid someone to care for the person with dementia so you could work or look for work, you may be able to claim the "Child and Dependent Care Credit" on your federal income tax return. If eligible, you would be allowed a credit of up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.
There are restrictions and thresholds in place so be sure to consult with a tax advisor and review the two IRS publications on this issue for details.
IRS Publication 502: Medical and Dental Expenses has a complete list of allowable expenses
IRS Publication 501: Exemptions, Standard Deductions and Filing Information to learn more about claiming the person with dementia as a dependent.
Also visit www.irs.gov for more information.
Visit the Alzheimer's Association website for a more detailed overview of tax deductions and credits that are available for out-of-pocket medical expenses paid by families caring for a loved one with Alzheimer's at home.
IMPORTANT:
If you have an IRA and are struggling with the costs of care, be sure to email me about a NEW PRODUCT that allows you to roll your IRA into a Long Term Care Policy without having to pay income taxes on the money withdrawn. This can be a lifesaver!!!
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Don't miss my next
free "RAISING UP YOUR PARENTS"elder care seminar
Click on the link below to register!
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My Watch Dog
Alerting you to the latest SCAMS, Elder Abuse,
and things that are just plain WRONG!
First it was Mickey, then Casey, now Glen?
Who's next?
Almost every week I get two or three calls from the sons, daughters, friends, and relatives of elderly people who are embroiled in disputes over care or an estate.
Glen Campbell is in the late stages of Alzheimer's and living in a nursing home. Now his wife is in a dispute with her step-children who claim she won't let them see him. She says they are only interested in money. So, as you can see, it doesn't matter how rich or famous you are, Glen Campbell, Casey Kasem, or Mickey Rooney, any one of us can end up being abused and our family fighting over our estate. Take the time to plan ahead.
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SOCIALIZATION FOR THE 60+ GROUP
There is finally an online local social resource for boomers, seniors, and caregivers. Things to do, places to go, and people to meet in the greater San Fernando Valley area for those looking to find out what's going on in their backyards. To join their mailing list go to www.suddenly65.com
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Alzheimer's Update
Scientists have detected a number of drugs which could help protect against Alzheimer's disease, acting like statins for the brain.
In experiments on worms, University of Cambridge researchers identified drugs which prevented the very first step towards brain cell death.
They now want to match up drugs with specific stages of the disease.
Experts said it was important to find out if these drugs could work safely in humans.
Statins are taken by people to reduce the risk of developing heart disease and the Cambridge research team says its work may have unearthed a potential "neurostatin" to ward off Alzheimer's disease.
Genetically programmed worms
Rather than treating the symptoms of the disease, a neurostatin could be used as a preventative measure to stop the condition appearing in the first place.
The cancer drug bexarotene, for example, was found to stop the first step which leads to the death of brain cells in worms genetically programmed to develop Alzheimer's disease.
In previous trials in humans, researchers tested the drug at a later stage of the disease to see if it would clear amyloid plaques from the brain but the trials were unsuccessful.
Dr Rosa Sancho, head of research at Alzheimer's Research UK, said scientists must find out exactly how the drug works before any clinical trials.
"We will now need to see whether this new preventative approach could halt the earliest biological events in Alzheimer's and keep damage at bay in further animal and human studies.
"This early research in worms suggests that bexarotene could act earlier in the process to interfere with amyloid build-up."
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Do you need my help?
- Medi-Cal Planning and Asset Protection
- Living Trust
- Nursing home abuse litigation
- Probate
- Post Death Estate Administration
- Conservatorships
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Susan B. Geffen | Gerontologist, Attorney, Author | 1(888) 422-6070
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