Can rehab cost and home health aide cost be reported on income tax return? - AgingCare.com

Can rehab cost and home health aide cost be reported on income tax return?

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We paid about $14,000 at a rehab center after medicare stopped paying and then had home health aides thru an agency after he came home. Can this cost be reported on his tax return as a medical expense? He is 93, obviously retired, and only has medicare as his health insurance.

I'm wondering if he could get a return as a result of this expense.

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Yes as long as expenses are not reimbursed by another payor and, along with other eligible medical expenses, exceed 7.5% of Adjusted Gross Income.
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Hell yes these are deductible medical expenses! I already filed and $14K with charitable contributions, mileage, etc. might add up to over $14,600 which is the standard deduction (married filing jointly), so itemize. You could try FreeTaxUSA and they will give you the best choice for a refund. Good luck!
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http://www.irs.gov/publications/p15a/ar02.html#en_US_2014_publink1000169480
I pay two ladies who rotate staying with my mom during the day. I have companion/caretaker agreements with both of them and treat them as self employed individuals as per IRS link above regarding statutory nonemployees, part of which states, "Companion sitters. Companion sitters are individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled. A person engaged in the trade or business of putting the sitters in touch with individuals who wish to employ them (that is, a companion sitting placement service) will not be treated as the employer of the sitters if that person does not receive or pay the salary or wages of the sitters and is compensated by the sitters or the persons who employ them on a fee basis. Companion sitters who are not employees of a companion sitting placement service are generally treated as self-employed for all federal tax purposes. "
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Yes read the IRS publication on allowable deductions. A tax consultant is recommended here. They often find many deductions you miss.
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The rehab costs are definitely a medical expense. The home health aide fees would be a medical expense if they were ordered by his doctor. Medical expenses are an itemized deduction to the extent that they exceed 7% of his adjusted gross income. Of course, he can only get a federal tax refund if he has paid estimated taxes or had taxes withheld from social security, annuity or other payments he received during the year. Many elderly do not have enough income to pay income tax anyway, so the medical expenses have no impact.
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My question is regarding mileage. I deliver Meals on Wheels and was wondering what amount can I deduct from my taxes?
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Delivering Meals on Wheels is considered a charitable activity. The mileage rate for both 2013 and 2014 is 14 cents per mile. This would be an itemized deduction on Schedule A. You should keep records of the date and number of miles driven.
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I paid someone to provide 24 hour care fo my parents last year. Their only income is social security. I did not withhold taxes or medicare for the caretaker. Is there any way I can deduct this on my taxes?
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No Peach, you cannot. It was very nice of you to get care for your parents, but it is in no way deductible. Of course you know you violated several laws by not doing withholding and payroll taxes, too. Should your employee file a comp claim or try to get unemployment, you will have a real SNAFU on your hands.
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But can the senior deduct them from their own taxes if they are still getting medicare? Can they deduct the cost of the live-in caregiver?
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