Reduce the Financial Burden of Alzheimer’s

Feb. 8, 2011 - PRLog -- Caring for a loved one who has Alzheimer’s disease can be a draining experience, not just emotionally but also financially. Family members must bear the costs of medical care and supplies; services such as in-home or assisted living care can be prohibitively expensive; caregivers who work must arrange for some type of supervisory care. Fortunately, certain U.S. tax laws can lighten the financial burden by allowing certain deductible expenses and tax credits for elder care. Some states even offer further assistance. The Society of Certified Senior Advisors has released a new article that discusses the different tax deductions and credits available to caregivers.

The Cost of Care
The U.S. national average for Alzheimer’s care in an assisted-living community could total more than $51,000 per year; the cost of living in an Alzheimer’s-specific unit of a skilled nursing facility could top $79,000 (Shelton, 2010). Families who cannot afford such onsite services often struggle to provide care for their loved ones at home.

These families face expenses – many times, out of pocket – for medical supplies and therapies, transportation to doctor’s appointments, and medications. For caregivers who must work or who need a respite, adult day services can be a necessity; studies put the cost of such services at $64 to $100 per day (Shelton, 2010). Caregivers who face such financial demands might be eligible to deduct such expenses on their U.S. tax returns. Others might be able to take advantage of tax credits that are designed to help taxpayers who use dependent care.

Medical Expense Deductions
According to the Alzheimer’s Association, expenses such as nursing care, transportation to essential medical care, in-home therapy, home modifications (e.g., wheelchair ramps), special food or care items, and nursing-home or assisted-living care may all qualify as medical deductions for a taxpayer who suffers from Alzheimer’s disease or for that person’s caregiver – if the person with Alzheimer’s qualifies as a dependent (Alzheimer’s Association, 2010.)

The total medical deduction is the amount of a person’s medical expenses in excess of 7.5 percent of that person’s adjusted gross income (Strauss, 2008). As a deduction, the amount reduces the person’s taxable income; a tax credit, by comparison, is subtracted directly from a person’s actual tax debt.

If a senior who has Alzheimer’s disease does not qualify as a dependent on another person’s
tax return, then these deductions can be applied to the senior’s own income. A senior who files as a dependent on his or her spouse’s return would apply the deductions to that return. However, other relatives (e.g., children siblings, grandchildren, in-laws) can also claim the senior as a dependent for tax purposes, if certain conditions are met (Alzheimer’s Association, 2004.) In general, to qualify a senior as a caregiver’s dependent, the caregiver must meet three conditions:
1.  The caregiver must provide more than half of the senior’s total support for the year.
2.  The caregiver must be a relative of the senior or must share a primary home with and be a member of the same household as the senior.
3.  The senior must be a citizen, national, or resident of the United States or a resident of Canada or Mexico.

If you would like to read the full-length of this article, which includes information on employment taxes for in-home care providers, dependent care tax credits and state tax support, visit the Free Resources section of the CSA website at http://www.csa.us/freeresources.

Caregivers keep in mind that tax law is a complicated subject. You are encouraged to consult with a qualified tax attorney or financial specialist. For further information, visit the IRS website at http://www.irs.gov and review IRS Publications 502, 503, and 524.

The Society of Certified Senior Advisors (SCSA), provides free resources and tools for our members as an ongoing commitment that we have in helping professionals to understand the complex and dynamic lives of modern senior citizens.

About SCSA
SCSA’s mission is to educate professionals to work more effectively with their senior clients. For those who work with seniors, this means understanding the key health, social and financial factors that are important to seniors—and how these factors work together. CSAs are able to integrate this into their professional practices, no matter what field they’re in. They’ve learned how incredibly gratifying it is to help seniors achieve their goals, and the seniors they’ve worked with have learned how important it is to work with someone who truly understands their age-related circumstances.  For more information about SCSA and its educational course, please visit http://www.csa.us.

Contact:
Erica Ananich, SCSA
(888) 538-2599
society@csa.us
http://www.csa.us/blog

Refer a colleague today, visit https://www.csa.us/CSAReferral

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SCSA educates professionals to work more effectively with their senior clients. That means understanding the key health, social & financial factors that are important to seniors — so you can find success in the senior market.