Online Resources to Help Seniors With Tax Preparation

tax form with calculator and glasses

As we head into tax season, you might be wondering if the money you spend on senior care—whether for yourself, a spouse, or a parent—is considered a deductible expense. This area of tax law can be especially confusing for adult children. Families may also be searching for a trustworthy tax preparer who understands all the potential deductions an older adult might be eligible for.

While this information shouldn’t be misconstrued as tax advice, there are a few resources we can share to help get you moving in the right direction.

Connecting With a Senior-Friendly Tax Preparer

One concern to be aware of is that identity theft rises every year during tax season. While taxpayers of all ages can be targets, experts say older people are usually at greater risk. It’s important to protect yourself and your loved ones against scams. This article has some good tips on steps you can take to avoid becoming a victim, from filing early to securing your personal information and finding a trusted tax preparer.

Most of us have likely watched news coverage of seemingly legitimate financial advisors who’ve skipped town with clients’ files. It’s one reason organizations such as public libraries and area agencies on aging offer these services for seniors.

To help put your mind at ease, the Internal Revenue Service (IRS) also maintains a database of credentialed tax professionals. The Directory of Federal Tax Return Preparers With Credentials and Select Qualifications allows you to enter your zip code and select the number of miles from home you are willing to drive. You’ll receive a list of agents that includes names, addresses, credentials, and distance from you.

Next, let’s move on to a few resources relating to senior care deductions that families can review before meeting with their tax advisor.

IRS Publications That Address Senior Care Deductions

It’s not only older adults and their spouses who are financing senior care. In fact, it’s fairly common for grown children to help pay for home care, assisted living, or other types of assistance when a parent’s income and assets fall a little short. Some family members who offer financial support for senior care aren’t aware that they may be entitled to a tax deduction.

Others are aware of these deductions but find the process too confusing to navigate. Much of the uncertainty comes from figuring out what portion of a senior’s monthly fees is considered medical care. Another difficulty is figuring out if a loved one meets the criteria to be considered a dependent.

Unfortunately, there isn’t a quick or easy answer to either of those issues. Some senior living providers offer a breakdown of which monthly expenses are considered medical and which are custodial. This can help address the first issue. The second is more complex and generally requires the advice of a professional tax preparer familiar with senior care.

Before your meeting, it may be helpful to review these two IRS publications that pertain to senior care and tax deductions:

  • IRS Tax Publication 502: This publication should provide you with at least a general understanding of medical and dental expense regulations. It might help explain what the IRS considers to be medical care and what financial threshold you must meet. This section of the IRS code also defines what a “qualifying relative” is. That’s important in determining whether your relationship to your family member meets the criteria.
  • IRS Tax Publication 503: Like the previous publication, IRS 503 covers other common sources of confusion for seniors and their family members. It explains what dependent care expenses are and also outlines which expenses you may be able to deduct for a loved one’s medical care.
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