Deducting Long-Term Care Costs On Income Tax Return

Long-term care includes the ongoing medical and social services that address the needs of those living with a chronic illness, disability or lack of mental capacity, such as Alzheimer’s disease. Long-term care involves assistance with daily tasks, such as bathing, dressing or eating. It may also include assistance with daily living activities, such as house cleaning and transportation.

Long-term care services may be provided in a number of ways, including through home care, nursing home or assisted living. Long-term care can be costly, leading to the depletion of financial resources. Deducting the cost of care from income tax liability may help preserve funds, as well as allowing resources to be allocated toward a recipients future needs.

Are Long-Term Care Expenses Tax Deductible?

According to Section 213 of the Internal Revenue Code, deductions of unreimbursed medical expenses paid by a taxpayer for himself or herself, a spouse, or a dependent to the extent that the expenses exceed 10 percent of the taxpayer’s adjusted gross income are allowable. Medical expenses include premiums for health insurance, dental care, and medical supplies and equipment, among others. A taxpayer may not deduct medical expenses that are reimbursed by an insurance company.

In general, medical expenses may be deducted when services were provided and an individual paid for those services. According to Internal Revenue Code Section 203(c) medical expenses paid out of a taxpayer’s estate within one year of his or her death is to be treated as paid by the taxpayer at the time the expenses were incurred. This includes any unreimbursed cost of care from a hospital or skilled nursing facility.

Managing the cost of long-term care can be very stressful. It is important to have a comprehensive plan in place to meet your current and future long-term care needs and protect your assets. The Long Island estate planning lawyers at Blodnick Fazio & Associates PC are experienced in handling all aspects aspects of estate planning and are dedicated to representing its clients with diligence and compassion. For more information or to schedule a consultation, contact our Long Island estate planning law firm at (516) 280-7105.

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