Category Archives: Law

Who Qualifies for Senior-Care Tax Deductions?

Tax season can be especially stressful for seniors on a fixed income and for family caregivers of elderly loved ones—groups that include millions of budget-conscious Americans looking to keep expenses down.

The good news is that seniors and caregivers may be eligible for tax deductions for medical and dental expenses. Another bright spot in 2017 is that final tax returns are due Tuesday, April 18, three days later than the standard April 15 date. This year the 15th falls on a weekend and Monday, April 17, is Emancipation Day, a federal holiday, giving tax filers until April 18 to complete their returns.

Seniors receiving medical care in assisted living may qualify for tax deductions. This includes residents with Alzheimer’s or other forms of dementia who require substantial supervision to protect their health and safety.

Taxpayers married to or related to seniors requiring care may be eligible for deductions if the senior qualifies as the taxpayer’s dependent according to IRS requirements. Detailed information on dependency can be found at http://www.irs.gov/publications/p554/ch05.html. Additionally, the caregiver must provide more than half of the support for the senior during the year.

Which Senior Living Expenses Can Be Deductible?

For certain assisted living expenses to be tax deductible, the resident must be considered “chronically ill.” A doctor or nurse needs to have certified that the resident either:

  • Cannot perform at least two activities of daily living, such as eating, toileting, transferring, bath, dressing, or continence; or
  • Requires supervision due to a cognitive impairment (such as Alzheimer’s disease or another form of dementia). 

To qualify for the deduction, the senior’s personal care services need to be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse or social worker must prepare a plan that outlines the specific daily services the resident receives.

Typically, only the medical components of assisted living costs are deductible and ordinary living costs like room and board are not. But if the resident is chronically ill and the facility is acting primarily for medical care and the care is being performed according to a certified plan of care, then the room and board may be considered part of the medical care and the cost may be deductible.

Residents who are not chronically ill may still be able to deduct the portion of their expenses that are attributable to medical care, including entrance or initiation fees.

Which Medical Expenses Can Be Deducted?

  • Premiums for insurance policies that cover medical care are deductible, unless the premiums are paid with pretax dollars. Generally, the payroll tax paid for Medicare Part A is not deductible, but Medicare Part B premiums are deductible.
  • Payments made for nursing services.
  • Medical fees from doctors, laboratories, assisted living residences, home health care, and hospitals
  • The cost of long-term care, including housing, food, and other personal costs, if the person is chronically ill.
  • The cost of meals and lodging at a hospital or similar institution if a principal reason for being there is to receive medical care.
  • Home modifications costs such as wheelchair ramps, grab bars, and handrails.
  • The cost of dental treatment.
  • The cost of travel to and from medical appointments.
  • Personal care items, such as disposable briefs and foods for a special diet.
  • Cost of prescription drugs.
  • Entrance fees for assisted living.
  • Room and board for assisted living if the resident is certified chronically ill by a healthcare professional and follows a prescribed plan of care. Typically this means that they are unable to perform two activities of daily living (ADLs) or require close supervision due to dementia or other conditions.

To claim the deduction, the medical expenses have to be more than 10 percent of the resident’s adjusted gross income. (For taxpayers 65 and older, this threshold will be 7.5 percent through 2016.) In addition, only medical expenses paid during the year can be deducted, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance.

For more information on what can and cannot be deducted for medical expenses see Publication 502 on the IRS Web site at http://www.irs.gov/pub/irs-pdf/p502.pdf.

Free Tax Preparation Help for Seniors and Caregivers

Preparing tax returns for seniors and caregivers can be complex, and tax rules may change from year to year. Need help? Consult a tax adviser, or get expert advice at an IRS-sponsored tax center free of charge. To find out what services these tax help centers offer, how to find one near you, and what you’ll need to bring when you visit, go to the IRS Web site at https://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

 

What’s Ahead From Our New President?

At this writing, the Inauguration of Donald J. Trump plays out, and the country’s emotions remain divided with celebrating and protesting.

It’s bound to be another year of healthcare upheavals as we wait to see if the incoming administration will follow through on its promise to “repeal and replace” the Patient Protection and Affordable Care Act (ACA) and call for other reforms that would potentially affect Medicaid funding, pharmaceutical regulation and the health insurance industry.

…read more at Senior Living News

Medicare Sign Ups October 15 – December 7, 2016

It’s that time of year again

For 2017 Medicare coverage, Open Enrollment begins for Medicare  in the fall of 2016, from October 15 to December 7.

People with Medicare can change their choice of health coverage (whether they receive that coverage through a private Medicare Advantage plan or traditional Medicare), and add, drop or change Medicare Part D drug coverage.

During this annual enrollment period (AEP) you can make changes to various aspects of your coverage.

  • You can switch from Original Medicare to Medicare Advantage, or vice versa.
  • You can also switch from one Medicare Advantageplan to another, or from one Medicare Part D (prescription drug) plan to another.
  • And if you didn’t enroll in a Medicare Part D plan when you were first eligible, you can do so during the general open enrollment, although a late enrollment penalty may apply.

It’s very important that Medicare beneficiaries review their drug plan annually. Why? Because Medicare private drug plans can make changes each year; changes can include which pharmacies are in their networks as well as which drugs are covered and the costs.  Most people can only change their plans during the Fall Open Enrollment Period.

Find out whether medications you are taking will be covered on your plan next year. If your physician had to submit a prior authorization exception request and you need the same medication next year, call your plan to find out what you need to do to make sure that your plan continues covering your medication. Your physician may need to submit a new request and he may be able to do so before the end of the year to ensure that your coverage continues without interruption.

Now is the time to be asking questions! For more information visit

http://www.medicareadvocacy.org/the-medicare-annual-coordinated-election-period-has-begun/

Do Seniors Need a Living Will?

What is a living will and who should have one?

Discussions about end-of-life and critical-care issues are never easy and often get put aside because no family members are at that stage, but planning ahead can prevent confusion, conflict and unnecessary suffering during times of worry and grief.

Knowing a loved one’s wishes before an illness or accident ensures that family members won’t have to make difficult choices on the loved one’s behalf during a crisis.

Livings Wills Are Legal Instructions

Also called advance directives or healthcare directives, living wills are written, legal instructions detailing a person’s preferences for medical care if he or she is unable to make decisions. Advance directives guide healthcare choices for medical professionals and caregivers if a person is terminally ill, critically injured, in a coma, in the late stages of dementia or near the end of life.

Advance directives aren’t just for older adults. Because unexpected critical-care and end-of-life situations can occur at any age, it’s crucial for all adults to prepare these documents.

Studies show that older adults feel especially relieved to know that their specific and personal end-of-life preferences are documented and will be carried out, therefore freeing their families from making these decisions.

Living Wills and Power of Attorney

A living will typically works together with a medical power of attorney (POA). Some states combine the two into one document. The medical POA enables a person to select somebody (a spouse, other family member, or a trusted friend) to make medical decisions on his or her behalf. These two documents can allow you to control the types of medical treatment you’ve chosen, and who will make sure your wishes are honored.

Which Medical Treatments Should You Think About?

The living will typically spells out medical treatments you would or would not want to be used to keep you alive, as well as other options such as pain management and organ donation. Talk to your doctor, healthcare agent (the person with POA), your family, and friends about your personal wishes. Would you want to extend treatment in any situation? Would you want treatment only if recovery is possible?

These are some of the primary issues to consider:

  • Resuscitation to restart the heart. You don’t need a living will to have do not resuscitate (DNR) and do not intubate (DNI) orders. These orders can be prepared separately and put in your medical record.
  • Mechanical ventilation to take over breathing if you can’t breathe on your own.
  • Tube feeding to supply the body with nutrients and fluids intravenously or through a tube in the stomach.
  • Dialysis if your kidneys cease to function.
  • Antibiotics or antiviral medications used near the end of life.
  • Palliative care to keep you comfortable and manage pain at end of life, including being allowed to die at home, getting pain medications, being fed ice chips to soothe dryness, and avoiding invasive tests or treatments.
  • Organ and tissue donation for transplantation.
  • Donating your body for scientific study.