Are Assisted Living Costs Tax-Deductible?
Yes, some assisted living costs may be tax-deductible, but there are specific requirements:
- Itemizing Deductions: You must itemize your deductions on Schedule A of your tax return instead of taking the standard deduction.
- Medical Expenses: Only medical expenses related to assisted living are deductible. These typically include:
- Medical Care: Services such as medication management, on-site therapies, and transportation to medical appointments.
- Long-Term Care: Assistance with activities of daily living (ADLs) such as bathing, dressing, and toileting, if the resident is considered chronically ill.
- Exceeding 7.5% of AGI: Medical expenses are only deductible to the extent that they exceed 7.5% of your adjusted gross income (AGI).
- Qualifying Resident: If you are paying for a family member's assisted living, they must meet the criteria to be claimed as a dependent on your tax return.
Important Notes
- Non-Medical Expenses: Costs like room and board, meals, and recreational activities are generally not deductible.
- Consult a Tax Professional: Tax laws can be complex. It's always best to consult with a qualified tax advisor or accountant for personalized guidance based on your specific situation.