Is Assisted Living Expenses Tax Deductible? What You Need to Know

When planning for senior care, one of the most common questions families ask is, “Is assisted living expenses tax deductible?” At Serenity of Commerce, we understand the financial challenges of finding quality care for your loved ones. In this blog, we’ll explore the tax implications of assisted living costs and how you can potentially save on expenses while ensuring your family member receives the best care.

Understanding Tax Deductions for Assisted Living

The Internal Revenue Service (IRS) allows certain medical expenses, including elder care services, to be tax deductible if they meet specific criteria. Assisted living expenses may qualify if they are primarily for medical care rather than personal or custodial care. Here’s what you need to know:

1. Medical Necessity

To qualify, the resident must be in the facility primarily for medical reasons. This includes needing assistance with activities of daily living (ADLs) like bathing, dressing, or medication management.

2. Certification by a Licensed Healthcare Professional

A doctor must certify that the resident requires the level of care provided by the assisted living facility or senior citizen group home.

3. Itemized Deductions

You can only claim these expenses if you itemize deductions on your tax return. Keep detailed records of all payments made to senior care agencies or facilities.

4. Threshold for Deductions

Medical expenses, including eligible assisted living costs, are deductible only if they exceed 7.5% of your adjusted gross income (AGI).

What Expenses Qualify?

• Room and Board: If the primary reason for being in the facility is medical care, a portion of room and board may be deductible.

• Daily Senior Care Services: Costs for assistance with ADLs, nursing care, and therapy services may qualify.

• Medication and Medical Supplies: Prescription drugs and medical equipment used in the facility are deductible.

How Serenity of Commerce Can Help

At Serenity of Commerce, we provide compassionate and comprehensive elder care services tailored to your loved one’s needs. Whether it’s daily senior care or long-term residency in a senior citizen group home, our team ensures your family member receives the highest quality of care. We also work closely with families to provide documentation that may help with tax deductions.

Frequently Asked Questions

1. Are all assisted living expenses tax deductible?

No, only expenses related to medical care qualify. Personal or custodial care costs are not deductible.

2. Can I deduct costs paid to senior care agencies?

Yes, if the services provided are medically necessary and meet IRS criteria.

3. What documentation do I need for tax purposes?

Keep receipts, invoices, and a doctor’s certification of medical necessity.

4. Does Serenity of Commerce provide tax-related documentation?

Yes, we provide detailed invoices and records to assist with tax filings.

5. How do I know if my loved one qualifies for deductible expenses?

Consult with a tax professional to determine eligibility based on your specific situation.

Conclusion

Understanding whether assisted living expenses are tax deductible can help ease the financial burden of senior care. At Serenity of Commerce, we’re committed to providing exceptional elder care services while supporting families with the resources they need.