Feb 13, 2018|
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Yeah. The statistics are startling. I wanted to share a statistic as it relates to those. Americans who are taking care of the elderly or seventeen. Million people. In the United States who are actively taking care of their elderly parents is according the Bureau of Labor Statistics. We're to talk about it because a study by the urban institute. Found that out of pocket expenses can run a 140000. Dollars on average in families in which. An elderly person has long term care needs we're joined by Andrea coombs from nerve wallet to talk about this Andrea welcomed the show. So I was shocked I had no idea there were seventeen million people take care of elderly parents. It is a lot of people and they're really big expense and I you know I think people and I think about the pennant they think about children but. Our parents can be it can be dependence as well and something I think about plant floor. What I have a friend who had a very successful career. And she left her job in order to take care for aging parents is that common. You know I don't have a statistic that I've definitely heard anecdotally that it happens. You know. It definitely happens it's it's an issue in the and then you have that combination of these expenses for the care plus the lack of intent that the that the real that the real. Struggle I think for a lot of Amylin. So what are the tax ramifications if I'm. If if finally if let's just give me an example let's say my mother in law moves in with me on providing her with shelter on providing her with food. I'm providing her with care and driving her to a doctor's appointments and you know just like take helping to take care of her. What would've I allowed to deduct on that if anything. Church or church there are a few deductions and credits that I won't say it's a lot and that won't really cover. In after taking total care of them but it may not. It's sort of toward the top of the pocket I would say that there are some of that tax benefit that you wanna consider. Now this is you know in that situation you just described that that does sound like and your mother and pop but qualified independent that's that's the real. You know attack this question that you have to answered does your parent qualify as a dependent. And generally speaking that you know that you provide more than half their support for the year there are enough for each of us. Credits and deductions not tell you about you know there are different rules but you really need to do your research. And for instance there might be income limitations for the parents felt. If you couldn't kept him out and a lot does she have any income beyond social security and if she does. That may impact when he can claim you know what they attacked and of itself and I play like that available hopes. Personal exemptions they know you can take a person that should be yourself an apartment that's and for any of your dependents if the parent qualify as. As independent you can claim that 4050. Dollars at the property as you're gonna you're income. Tax blink comes up about them. You know that's the benefit right there. Again not you have to picture of Connecticut that Karen qualified. I dependent and Munich looking to their income and all that so you research. Another. Tax benefit that the dependent care credit. Now to credit which has really weak that reduces your tax bill dollar for dollar you know like we like the credits and that is essentially words at maximum of about a 1050 dollars. This year. Yet another way it works does it up to 35%. Of up to 3000 dollars an expensive so. You know it and then their income limitations. Eddie claimed that that that limits what you can claim 35% or twenty or 20%. I'll wager let me ask you about bigger ticket items. Let's go to the biggest one of all the nursing home let's say your mother in law. Is ill and you can't keep or at your house and you have her go into a nursing home in your writing that check to that nursing home or assisted living facility. 70080101000. Dollars a month. Cannot deduct that on my taxes she's my dependent. Can I did take a deduction for that 101000 dollar monthly payment that I'm making to the assisted living facility. It is so yes you're pretty you're dependent. A each unit there at the medical expense deduction that you claim for dependence. Amend my understanding and other I have to say I would you have to look at the rules to make sure that they expend your paying for a qualified of the medical expense they can claim that deduction. Right it probably depends like an assisted living facility is not going to be all deductible. But in nursing home would be because that's eat they have to be there. So you react to each individual taxpayer have to go and look for themselves whether there. I'll let the bat deduction and you have to itemize claimed deductions. But if you are sodomizing men. You can and and then again at the for the dependent you're talking about. They knew Mike Miller deduct the cost. That exceed. Seven and a half percent and you're just addressing them now interestingly it would get that bat they dollar that means is it a percent of its. Figures that and a half percent effort went seventeen it was actually 10% for for 2017. But via the new tax law that just passed in December and that team that moved to back out of them and a half percent a little a little. It's exactly a little bit of a benefit there you know a little bit more of your expenses should be deductible on thing about now that. Seven and a half percent is only in effect between seventeen and I mean eighteen and then of the plated the go back at 1010%. That will be you know maybe that. Who knows what will happen from him by him and it by the time it may not. Change maybe congress for the but it would keep it 7% we don't know. Coming off a to point out we talked about the personal exemptions. 4050 dollars that is available in winning seventeen. Not available and when he eighteen and beyond attacked by eliminated personal exemption. All right so that doesn't help us for this year does does. It if helps too when you go to file your 2017 taxes but it does not help you went when he. Right right is there a a place to go away because like I am already getting messages on our FaceBook page where it where do you where does somebody go. To try to give answers like yes it did they have to go to their CPA because a lot of people a lot of our listeners may not have a CP. Right yet it's really good question and a hard landing answer. You know there are enrolled agent you are tax expert yeah you know there are taxed repair its mandate you know. They they can have been focused on your tax return rather than the EPA might have a broader. You know who wrote my beard you're your tax consultant more than men enrolled agent on. They might be more affordable for some people's planning attacks prepare for the enrolled agent you. There are for people. Who qualify there are actually. You know AARP update. Tax aide program. Wait I can go and get your taxes done by a trained volunteer yeah. Not qualify. And then. Given that night I looked it. The major tax software providers. They're pretty helpful when he when he's sitting there doing your taxes I mean I think. When. When that your situation is getting complex if you need to do your research and it can be kind of interested theory it's not an and I mean. I would I would recommend her to lie we have a great tax. Back and a lot of great stories there but yeah I you have to make sure you trust. Every looking at on the Internet and actually getting derided by the but the big tax software companies do you know as you're going through. Doing your taxes they do ask the question. Get you to the right answer. All right thank you very much anger appreciate your time. You know Michael it occurs to me. The there's seventeen million people. Across the country providing care and it just at that's a staggering. Number yeah and could be as much as you know your mother in law living with you your father in law living with few or being a live. Independently but you're helping him pay their rent Harrington that that. I'm not all that surprised I see this a lot with people in there fifty's and sixty's the you know clients clients and just people we ran into in the fifties and sixties that. Have to pull back from workers can't get into a job because of it.