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It isn’t just time, but money that most caregivers donate to help maintain the ones they love.  I know. I did it for years following willingly in the footsteps of my mom who also did it for years. The financial toll is often insidious. You shop and include their groceries, pay for repairs and the gas for trips to the doctor, you lose time at work and pretty soon we’re talking big money. To compensate you cut back on vacations, cut or discontinue savings, don’t get your teeth cleaned or you may even take out loans to cover caregiving costs.

There are several options that might help you save money on your taxes:

• Claim your aging parent as a dependent
• Deduct your medical expenses
• Use a dependent care credit
• Open a reimbursement account at work

According to the first in depth study of such expenses released in November 2007 by the National Alliance for Caregiving and Evercare, a division of United Health Group, the annual out-of-pocket cost of elder caregiving is $5,531.  Long distance caregivers spend about $3,000 more. These numbers are twice the previous estimates and are more than the average household spends on health care and entertainment combined.

For over a decade, there has been much talk but little action on periodically proposed national legislation to provide more tax relief in the form of tax credits or deductions for the more than 20% of Americans currently involved in caring for older relatives, spouses and friends. Both Presidents Clinton and Bush proposed a $3,000 tax credit to assist persons with long-term needs and the family members who care for them.  The most recent Bill S#2267, Americans Giving Care to Elders Act, was introduced In November 2007, read twice and sent to committee.  Caregiving is sure to become an issue in the upcoming presidential campaign, as evidenced by Hilary Clinton’s recently announced plan for caregiver relief. Until more relief comes along, it is important to understand and take advantage of the tax benefits that are available to you if you are supporting an elderly spouse, parent or relative.