There are many rewards for taking care of an elderly relative. They may include feeling needed, making a difference in the person’s life and allowing the person to receive quality care. In addition, you could also be eligible for tax breaks. Here are four potential tax breaks:

Medical Expenses
Filing Status
Dependent Care Credit
Credit for Other Dependents

Manager, Thomas Stoeckman, CPA, MAcc provides key tips to consider:

  1. Familiarize Yourself with Potential Tax Benefits: Understand the tax benefits available for caring for an elderly relative, such as deductible medical expenses and dependent care credits.
  2. Keep Detailed Records: Maintain thorough records of all medical expenses and caregiving costs incurred throughout the year to ensure eligibility for deductions.
  3. Explore Tax-Advantaged Accounts: Consider utilizing tax-advantaged accounts like Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to cover eligible medical expenses.
  4. Consult with a Tax Professional: Seek advice from a tax professional or accountant to maximize available tax breaks and ensure compliance with tax laws and regulations. They can offer personalized guidance based on your specific situation and needs.

Contact your CDS experts at (888) 388-1040 if you’d like to further discuss the tax aspects of financially supporting and caring for an elderly relative.