fbpx

Caring for Aging Parents

Caring for Aging Parents

Baby Boomers are sometimes referred to as the “Sandwich Generation,” because many spend time and money care for both their children and aging parents. In fact, according to the Pew Research Center, one in eight middle-aged Americans cares for at least one child and parent in their house. Aging parents who require expensive medical care and ongoing long-term care can become a financial burden, especially as Americans continue to live longer. There are ways to use these costs to lower your taxes and help fund long-term care expenses.

If you care for a parent and provide more than half of their support, you can no longer claim the $4,050 personal exemption for your parent. But, you can still claim them as a dependent if they do not file jointly with a spouse, you paid more than half of their support for the calendar year, they lived with you all year or are a qualified relative, and their gross income was less than $4,150.

You can also deduct what you paid for a loved one’s unreimbursed medical costs if it exceeds 7.5% of your adjusted gross income. The threshold used to be 10%, but for the 2018 tax year has been reduced to 7.5%. These costs can include dental treatments, health insurance premiums, transportation to medical appointments, and qualified long-term care services. Long-term care insurance is expensive, and there are long-term care myths, but most policies are tax-qualified so if you itemize consider deducting premiums. The amount you can deduct rises with age: Those 40 and under can deduct up to $420, and those 71 and over can deduct up to $5,200.

You can count long-term care services as medical expenses if they were required for a chronically ill person and prescribed by a licensed health-care practitioner. For example, if your loved one requires care because of a specific medical condition such as Alzheimer’s, these expenses can qualify. But, general household services cannot be deducted, even if they are performed by the same employee giving personal care services needed because of a chronic condition.  If you hire an in-home caregiver and want this deduction, you should get a letter from your loved one’s doctor documenting that the care is necessary.

If you’re not sure if taking the standard deduction or itemizing and taking these deductions is better for you, consult the professionals at Peak Financial Freedom Group. Taxes can constitute your biggest expense in retirement, and we want to try and help you minimize them. Click here to visit us online and schedule you no cost, no obligation financial review today.

Comments (8)

  • Hi my friend! I wish to say that this article is amazing, nice written and come with approximately all important infos. I would like to see extra posts like this .

  • You really make it seem so easy with your presentation but I in finding this topic to be really something that I think I’d by no means understand. It sort of feels too complex and very broad for me. I’m having a look ahead for your next post, I’ll attempt to get the hold of it!

  • hey there and thank you for your information – I’ve certainly picked up anything new from right here. I did however expertise some technical issues using this web site, as I experienced to reload the web site a lot of times previous to I could get it to load correctly. I had been wondering if your hosting is OK? Not that I am complaining, but slow loading instances times will often affect your placement in google and could damage your quality score if ads and marketing with Adwords. Well I am adding this RSS to my e-mail and can look out for a lot more of your respective interesting content. Ensure that you update this again soon..

Leave a Reply

Your email address will not be published.

Peak Financial Freedom Group
2520 Douglas Boulevard, Suite 110
Roseville, CA 95661

DISCLOSURE: All presentation data is provided and intended to be used for general educational purposes only and is not intended as a solicitation for you to buy or sell any financial product. None of the material in this presentation is intended to give you, nor are the presenters engaged in giving you, specific tax, investment, real estate, legal, estate, retirement, or financial advice, but rather to serve as an educational platform to deliver information; nor is it intended to show you how the strategies presented can specifically apply to your own tax, investment, estate, financial, or retirement position, but rather to offer an idea of how these principles generally may apply.

Stocks, bonds, or mutual funds have risks and can lose principal, even with a stop loss, and there is no guarantees of gains, as past performance is not indicative of future positive investment results. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund a new portfolio and/or annuity may have tax consequences, early withdrawal penalties, or other costs and penalties as a result of the sale or liquidation. You can’t invest directly into a stock market index. A fixed index annuity with an income rider can protect your savings from losses and provide you guaranteed lifetime income, but you could incur surrender charges, gains aren’t guaranteed, you’ll pay a fee, and guarantees are backed by the financial strength claims paying ability of the issuing annuity company.

Illustrations/projections displayed within this presentation are hypothetical in nature and should not serve as the sole determining factor in making financial decisions. Consult with a qualified investment, tax, legal, and/or retirement advisor before making any decisions. By contacting Peak Financial Freedom Group, you may be offered additional information regarding the purchase of financial products. Seminars, radio shows, TV productions, book releases, magazine and book promotions are sponsored, promoted and paid for by Peak Financial Freedom Group, LLC. If you place assets under management with our firm, we are paid an advisory fee, and if you purchase an annuity from our firm, we are paid commissions from an insurance company.

Investment Advisor Representatives of and Advisory Services offered through Fiduciary Solutions, LLC, a Registered Investment Advisor. Peak Financial Freedom Group LLC is primarily a fixed insurance sales organization and provides no Advisory Services. PFFG Insurance Agency LLC, CA License #0N14103, is a licensed insurance agency and provides no Advisory Services. Peak Financial Freedom Group LLC, PFFG Insurance Agency LLC, and Fiduciary Solutions LLC are separate affiliated entities. Insurance products and services provided by PFFG Insurance Agency LLC and independent agents.

Jim Files CA Insurance License #0F06511 Dan Ahmad CA Insurance License #0732913

© 2020 Peak Financial Freedom Group