Write Off In-Home Care on Your Taxes
By Your Side Home Care is dedicated to making all aspects of in-home care easier — even figuring out how it involves your taxes. In fact, many By Your Side clients wonder if they can write off in-home care on their taxes, and we are happy to counsel them on this issue.
While the 2017/2018 tax season is ending, this is still good information to have for next year and the years beyond. If you’re planning on exploring in-home care for your loved ones this year, we can help you navigate the choices ahead of you – including whether and how to write off the costs. As a leading provider of In-Home Senior Care, we can provide you some of the necessary information about paying for and writing-off our services. Read on to learn if you can write off your in-home care and other information you need to know.
Writing Off In-Home Care FAQs
Nothing with taxes is ever easy, but By Your Side and a qualified tax professional make it easier. Here are the most common questions people ask:
Can you write off in-home care on your taxes?
Depending on certain factors, yes, you may be able to write off your loved one’s in-home care on your taxes. We always recommend that our clients explore this avenue with their tax professional. The section that governs our services is called “QUALIFIED LONG-TERM CARE SERVICES” and is featured in section 26 USC §7702B as part of the IRS publication 502.
Are there any specific requirements to be able to write off long-term care?
One of the main requirements to be able to claim in-home care as a tax write off is the involvement of a physician in the care of your loved one. In order for the tax treatment to apply, the patient’s primary care physician must sign off on the service plan. In addition, the doctor must certify that the patient has a significant medical need for home care based on several conditions or limitations.
What are the qualifying illnesses or limitations for my loved one’s care to be tax deductible?
A physician must certify that the patient meets one of the following three requirements:
That the patient requires “substantial supervision” to prevent threats to their health due to cognitive impairments like Alzheimer’s or dementia.
That the patient in question has a disability.
That the patient in question is unable to perform two of the following daily living activities without assistance:
Eating
Bathing
Dressing
Transferring/Movement
Toilet
Continence
If the physician certifies this, the first hurdle is cleared.
What By Your Side Home Care expenses can I write off?
When you work with By Your Side, you’ll receive two bills: one to cover our office expenses and one to pay your caregiver. This unique structure allows By Your Side to keep our cost of care lower. If you qualify, you are able to write off BOTH types of expenses. In addition, you can also write off long-term care insurance premiums!
What forms do I file to write off in-home care?
You will need to file a W-10 for the variety of expenses you plan to claim.
Is there any paperwork I need to save?
Yes. Make sure you save every billing slip or invoice your caregiver provides you. In addition, ensure that your By Your Side caregiver’s full address and Social Security Number are present on each slip — before paying them. Keep all copies of the invoice and provide them to your tax professional.
What’s the best way to pay my in-home caregiver to help with tax write-offs?
To ensure accurate records for the sake of a tax write off, ALWAYS pay your caregiver with a check or money order. Although paying your trusted caregiver in cash can be easier, having the payment documented can be important.
Affordable In-Home Care in Lancaster and York, PA
Writing off your in-home care is an option which can help families handle the financial obligation. Ensuring your loved ones are well cared for is often a whole family responsibility.
Download our insider guide on how to pay for home care.
If you’re planning to begin home care for a loved one sometime soon, contact us to start the conversation or learn more about the specific in-home care services that our caregivers provide.