Assisted living is a growing industry that provides much-needed support to seniors and people with disabilities. However, it can be expensive, and many people wonder if the cost is tax-deductible. In this article, we will explore the tax deductibility of assisted living expenses and provide you with all the information you need to know.
What is Assisted Living?
Assisted living is a type of housing that assists with activities of daily living (ADLs), such as bathing, dressing, and eating. It also offers access to healthcare services and social activities, making it an attractive option for seniors who need some assistance with daily tasks but do not require 24-hour medical care.
Is Assisted Living Tax Deductible?
Assisted living expenses may be tax-deductible if they are considered medical expenses. According to the IRS, medical expenses are deductible if they exceed 7.5% of your adjusted gross income (AGI) for the year. This means that if your AGI is $50,000, you can deduct medical expenses that exceed $3,750.
What Expenses are Considered Medical Expenses?
The IRS considers a wide range of expenses to be medical expenses, including:
- Medical and dental expenses
- Prescription medications
- Transportation to and from medical appointments
- Premiums for long-term care insurance
- Home modifications to accommodate a disability
- Assisted living expenses
It is important to note that only the portion of the assisted living expenses that is related to medical care can be deducted. This includes the cost of meals and lodging that are provided as part of medical care, as well as any other medical services provided by the facility.
How to Deduct Assisted Living Expenses on Your Taxes
To deduct assisted living expenses on your taxes, you must itemize your deductions on Schedule A of your tax return. You will need to keep detailed records of your medical expenses, including receipts, bills, and statements from healthcare providers. It is also important to keep a record of the portion of your assisted living expenses that is related to medical care.
Assisted living can be an expensive but necessary option for seniors and people with disabilities who need some assistance with daily tasks. Understanding the tax deductibility of assisted living expenses can help offset some of the costs. As we have explored in this article, assisted living expenses may be tax-deductible if they are considered medical expenses and exceed 7.5% of your AGI for the year. It is important to keep detailed records of your medical expenses and to consult with a tax professional to ensure you are following all necessary guidelines.
If you have any questions or would like more information about the tax deductibility of assisted living expenses, please don’t hesitate to contact Belamour Care at 360-843-2957. Our team is always available to assist you in any way possible.