Paying for care
Medical expense tax deduction
The medical expense tax deduction lets people who itemize deduct medical and dental costs above 7.5 percent of adjusted gross income. Qualified long-term care services can count, if a chronically ill person needs them and a licensed practitioner prescribes a plan of care. Rules and limits apply.
Why it matters for your family
The IRS says a person is chronically ill if they cannot perform at least two activities of daily living without substantial help for at least 90 days, or if severe cognitive impairment requires supervision. Maintenance and personal care can qualify. Household help generally does not. If a bill mixes medical and household work, only the medical part counts. A common mistake is to deduct the full bill. Ask the provider to separate the services on the invoice. Keep the plan of care. A tax professional can tell you whether itemizing helps your family.
Source: irs.gov
Related terms
- Health savings account (HSA)A health savings account is a tax-favored account for people with a qualifying high-deductible health plan.
- Dependent care flexible spending accountA dependent care flexible spending account is an employer plan that lets an employee set aside pre-tax pay for care costs so the employee can work.
- Long-term care insuranceLong-term care insurance is a private policy that pays for help with daily living when a person can no longer manage alone.
- Activities of daily living (ADLs)Activities of daily living (ADLs) are the basic self-care tasks people do each day.
- Private payPrivate pay means a family pays for care directly from its own money.
- Care planA care plan is a written plan that lists a person's needs, goals, tasks, schedule and who does what.
