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Their care is starting to cost money - converting bathroom to handicapped accessible, mom fell and broke her hip, could really benefit from some in-home care. I’m single, make a decent salary but not enough for all of this.

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You should be and should have been filing as head of household. Your parents also should be paying for living expenses up to less than half of household expenses, and their income should be paying for any in home care if needed.
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AARP has a good article on this,

https://www.aarp.org/caregiving/financial-legal/info-2017/tax-tips-family-caregivers.html
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This is a question for an accountant in your home state.
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Toni,
You have some good answers here. I would also consider whether you and your parents should not see an elder law attorney now. You have shared living costs and they have SS and a pension. They should be helping with household bills for food, for repairs and changes they need to make home more accessible, for utilities costs and etc. This being listed as "shared living costs" means it is not listed as income to you such as "rental" nor as "gifting" from them, which would make any access to medicaid if ever needed in next 5 years problematic. I don't know if you are POA for financial or not already. But it may need to be considered for now or future, and you can check in on your rules for record keeping with all that.

It is just a good idea to go in for options and a "check up" and your parents should likely pay costs of this. If they are living with you they currently have few costs to cover I am thinking?

Best of luck to you all.
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I read your profile. You said they pay their Medicare insurance. We all do if we have A&B. Its deducted from our SS checks so u really don't notice it. Do your parents have a supplimental. If not, see if you can get Medicaid for health and maybe "in home" care. As their health worsens you may need to place them in Long-term Care with Medicaid paying. See your local Social Service office. Also ur Office if Aging for resources.

You may want to make it plain to them now that when their health worsens and they need more and more help with their ADLs, you will not be able to care for them. You cannot afford to quit your job and jeopardize your future Social Security earnings. You can not afford to pay for their care.

Your parents should be paying their own way. HUD has their recipients paying 30% of their monthy income for rent that Hud subsidizes. You really can't take all your bills and cut them in half and expect ur parents to pay that half. I would first take their monthly income and deduct their personal needs. They should be paying their own bills, like doctors, clothing, Depends, toiletries etc. Then its whats left. So if they bring in 1500 and 500 goes towards their expenses, you have 1000 to work with. Then you take 30 or 50% of that. Have them write you a check with rent written on memo line. Keep good records, never know when Medicaid will be needed.

You will need a contract for charging rent. Reason for an elder lawyer. You will never get back for what u spent on the bathroom from ur parents. By them paying for it, its considered a gift and will effect eligibility for Medicaid. Medicaid figures that you profit from that bathroom when u sell the house.
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You've received helpful answers here, so I'll just address the tax dependent question. I'm an AARP tax aide volunteer, and we have training and a handbook to guide us in determining if someone can be claimed as a dependent. Your parents meet the criterion of living with you. The next question to ask is what their income is. Generally if a person has more than $4,000 in gross income you can't claim them; however, this does not include social security benefits unless 1/2 of the social security benefit plus their other gross income (e.g., pension, interest) is more than $25,000. You also need to have contributed more than 50% toward their support in the tax year. For example for the income test, let's say mom has $20,000 in social security and $2,000 in pension; 1/2 social security is $10,000 + $2,000 pension = $12,000: Less than the $25,000 allowable so you could claim her as a dependent if you also contribute more than half her support. The issue of handicap accessible renovations is a bit of a grey area from the IRS standpoint in terms of determining dependent support, as it could be interpreted that these improvements add to the value of your house and therefore are not strictly speaking part of the support for your parents. But if you have to buy things out of your own funds that are strictly for them, e.g., supplies, wheelchair, hospital bed, then that could be counted as part of the 50% support threshold. The best thing to do would be to put together all your household expenses and also those that are specifically related to your parents which you pay and then consult with a tax attorney or professional tax preparer to provide more specific guidance. Without seeing your numbers, there would be no way I could determine your parents' dependency status if I were preparing your return so I'm just giving you generalities as I understand them.
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DrJanTaplin Apr 2023
Thank you for sharing your credentials. It helps in deciding what information to accept, and what information to take under advisement.
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I work for tax preparer, you can claim your parents, we claim my Father in Law, the only down side is that the IRS has put limits on what you can claim & what you receive. For the Federal tax return (1040), you get $500 for claiming an elderly relative that lives with you. That's per year, per relative. I'm not sure about the state level, as we live in a state that does not require state filings.
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christinex2ri Apr 2023
but you are claiming Head of Household which has a higher standard deduction as well as the $500 credit
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If either of them are veterans, please check with the VA about Aid and Attendance and other help. While we don't get Aid and Attendance, we do get my husband's briefs, Ensure, a wheel chair, a walker, bathroom aids and some even qualify for home modifications. I also get 16 hours a week home help. We use all our own doctors and only see theirs once a year. If I did not prefer our small pharmacy using our insurance, we could be getting prescriptions. I have learned that before paying out of pocket asking if this is a benefit he might be eligible... even have bedside suction because he has swallowing issues.
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Speak with an " Elder Law" attorney who may provide accurate information.
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Oh absolutely! Start looking into it.

I know in California there is a program, I’m not sure if you qualify so look into it, that pays you to care for your elderly or handicap relative.
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spreak with dept of aging in your county. medicade will provide much needed care if they dont own anything like a house.
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I believe u can claim them BUT THAT COULD MEAN THEY CANT CLAIM THEMSELVES.
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If you provide more than 1/2 of their cost of living expenses, you can claim them on your federal taxes and register as the Head of Household. This will lower your yearly tax rate.

I've been doing this for a few years and my tax software has the correct expenses deduction to be able to do this. You will need your parents social security numbers on hand, as well. Be sure to keep detailed records of what you provide to your parents upkeep and care. Your parents will not be able to file and claim themselves any longer.
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Igloocar Apr 2023
Forgotten2, you are spot on! ToniCh shouldn't need an accountant or attorney to do this unless she really wants to pay for one.
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Toni - you absolutely need to talk to your accountant about claiming your parents as your dependents on your tax returns. What benefit is there to you, who is shouldering the financial burden, if they file themselves? You need to free up cash to pay for things like making a bathroom ADA accessible, and claiming them as dependents would help a lot. Now that most accountants are coming up for air after the initial tax filing deadline, call your accountant and setup and appointment to discuss this and possibly amend your 2022 taxes. It's worth checking into soon.
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Call the Soc Sec office.
Whatever people may say here is encouraging / encouragement although you need to get the specifics of what is allowed in writing from the Soc Sec Administration.

Is he a veteran? There may be some support you can get, i.e., caregivers.

Gena / Touch Matters
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If you provide more than half their financial care, then ok. If not sure, tally up their bills and see if they are paying more than half or managing their bills.

Mom can get 'some' in home care via Medicare - physical therapy, occupational therapy, weekly nursing visits, probably quarterly podiatry (feet and toenail care). Doctor can order this service for you.
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Best to consult with a tax specialist.

If you are not already doing do keep all receipts for any supplies, expenses, etc you pay for their care. You will need these for many reasons.

Good luck to you.
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ToniCh: Pose your query to a certified public accountant. It may be a good idea, too, for you and your parents to see an elder law attorney.
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The costs are astronomical.......my late mom in a SNF and I couldn't get her LTC insured help get the documents that were needed to verify that she met the elimination period ........I said I'll do it myself.....adls, diapers.....I was so grateful when she qualified for the second hospice.....as I was new to the system I didn't realize that you give up your medicare part a benefits when you go on hospice so I renounced the first ......I felt suppose she runs a fever, etc and needs to go to the ER?......

Hospice wants to keep patients at home and out of the hospital......it was hard being the primary caregiver but better than those enormous costs. . ....my father was in a sense lucky that he was already in the hospital and moved to the palliative care unit as his condition worsened .......they managed his pain so that he no longer screamed in agony........they were a blessing to
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if you are providing over 50% of their care and they have lived with you more than 6 months you are probably able to claim Head of Household. More than likely their SS benefits are not federally taxable.
Contact your local AARP for a recommended tax professional to assist you or use HR Block for assistance.
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