An article by CNN Business shows that about one in every six Americans is 65 or older. While aging comes with many perks, like more free time, it also increases the need for long-term care.
Families often worry about costs as they transition their loved ones into senior living. A vital yet often ignored question is- "Are assisted living fees tax deductible?"
In this article, we will answer this question and help you determine how to maximize benefits. We'll also discuss other ways to cut assisted living costs while providing your loved one a good life.
Yes. Assisted living fees are tax-deductible, but this depends on several factors. The IRS lets taxpayers deduct medical expenses associated with assisted living. These may include charges for medication management and personal care.
Room and board costs can also be tax deductible, but a senior has to be considered chronically ill. If your loved one is in senior living, primarily for medical care, you can claim the cost of their room.
Apart from the deductions for assisted living fees, seniors can also get other tax benefits like:
If the medical costs of assisted living exceed 7.5% of a senior's adjusted gross income (AGI), they can be deducted from their tax return.
Seniors with long-term care insurance can also qualify for a tax deduction. However, the cost of premiums must also be more than 7.5% of their income.
If you financially cater to a senior who's your dependent, you can get the Dependent Care Credit. The benefit is for families who are paying for elderly care to be able to work. The amount of credit you may claim will vary based on your income and costs.
Knowing about tax benefits for seniors provides relief and helps families plan better. It reduces financial strain and gives seniors peace of mind.
Maximizing tax benefits for assisted living in Escanaba requires the following:
Keeping track of all expenses related to medical care in assisted living will ensure you claim the right amount. Have detailed records of all medical expenses, including receipts, bills, and statements.
Ensure that a healthcare provider prescribes the services you list as medically necessary. You should also work with your assisted living community to categorize your expenses correctly.
Seniors also benefit from other tax laws, like those pertaining to their properties. For example, they can get a 100% homestead property tax credit. However, the y taxes must exceed 3.5% of their income, with a maximum benefit of $1,200. Knowing about all the tax benefits available in Michigan can help seniors enjoy more relief.
Navigating tax laws can be complex, especially regarding specialized deductions like those for senior care. To maximize all possible benefits, you should work with a tax expert. They know the ins and outs of senior living tax deductions and can help you file correctly.
Other benefits of a tax advisor are:
Applying these measures to maximize tax benefits for seniors helps you manage your finances. You can use extra resources to pay for other services to make your loved one enjoy senior living.
Taking advantage of senior living tax deductions isn't the only way to cut costs. You can also use these assisted living financial tips:
The cost of assisted living can vary from one community to another. Compare different options and ask about their pricing structures. Doing so will help you find a community that matches your budget and your loved one's care needs.
When comparing the costs, it's also good to determine the services included in the price. An ideal community should offer essential amenities at a fixed price and then have optional ones. Such a structure ensures you only pay for necessary expenses to lower the overall assisted living cost.
Many senior living communities offer discounts for those who have served in the military. When moving a loved one into assisted living, ask about veteran-specific discounts. Such can help you save rent costs and limit your out-of-pocket expenses.
Opting for a smaller or more compact living space can also help reduce expenses. Most communities offer different room sizes, such as studio and one-bedroom apartments.
Choosing a smaller room can lower costs without sacrificing access to essential services. It's a great solution for seniors who don't need much living space but still want to enjoy the benefits of senior care.
Finding affordable senior living in Escanaba doesn't have to be overwhelming. Here are a few tips to help you:
Most senior housing communities offer discounts or special rates during holiday seasons. Don't hesitate to ask about current promotions that can help you alleviate costs.
There are numerous financial assistance programs for seniors in Escanaba. These could be through charitable organizations or veteran's benefits. Explore the resources available to you or your loved one by consulting your assisted senior living provider.
Affording assisted living in Escanaba is easier if you plan and learn about tax benefits. Identify tax-deductible expenses and take advantage of programs like long-term care insurance. You should also compare senior living communities and choose the most cost-effective option.
At Lakehouse Escanaba, we offer compassionate senior living in Escanaba. Our team can answer the question, "Are assisted living fees tax deductible?" in detail to ensure you have the right information.
They can also help you take advantage of other financial aid programs for seniors. Contact us for an inquiry or community tour.