How To Take Tax Write-offs For Helping Relatives

It’s very common for family members to become caregivers for other family members or help them financially when medical care or long-term care is needed. It’s also common for these families to leave money on the table by not taking all the tax breaks they could. An adult child might help pay for in-home services for a parent. The services could be basic housekeeping and meal preparation, or they might include nursing or other medical services. Or the adult child could pay for all or some of the cost of an assisted living or similar residence for the parent. Other times an adult child or other family member personally provides care for an older relative, either in the caretaker’s home or the home of the cared-for person. The caretaker might pay some or all of the costs or might only provide personal services while the cared-for person’s resources pay for food, utilities, and other expenses. There are financial and tax consequences to each form of care. Families should pay attention to the details and rules partly to ensure they receive maximum tax benefits and partly so each family member will feel he or she is treated fairly.

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Source: Forbes