As the population in the U.S. continues to age, more and more people will find themselves caring for their parents. Here are some of the tax breaks that caregivers should consider.
* If you provide more than half of your parent’s support, you may be able to claim your parent as a dependent on your tax return. To be eligible, your parent can’t earn more than $3,900 in 2013, excluding their nontaxable social security and disability income.
* What if you and your siblings all pitch in to support a parent? Anyone who contributes at least 10% of the total support can be the one to claim the $3,900 exemption if all of you sign a multiple support agreement.
* Even if a parent’s income exceeds $3,900 this year, you can still deduct the medical expenses paid on the parent’s behalf, as long as you provide more than half of his or her support.
* If you hire someone to take care of your parent while you work, you might qualify for the dependent care tax credit. Your parent must be physically or mentally incapable of caring for himself.
* Unmarried individuals who support a parent can file their tax returns as “head of household.” To qualify, your parent doesn’t need to live with you. Instead, as long as you pay more than half of the cost of maintaining your parent’s main home, including a rest home or nursing facility, you qualify for this preferential tax treatment.
For more information about the tax issues affecting caregivers and their parents, please give us a call.