Deduct expenses for long-term care on your tax return
The staggering costs of long-term care can wreak havoc on your retirement savings. According to the U.S. Department of Health and Human Services, about 27% of Americans turning 65 this year will incur at least $100,000 in long-term-care costs, while 15% will require care costing more than $250,000. That’s a hard pill for most seniors to swallow.
SEE ALSO:How to Afford Long-Term Care
But if you require long-term care, you may be able to deduct a portion of the costs on your tax return. If you purchased a long-term-care insurance policy to cover the costs, you may be able to deduct a portion of your premium payments, too. Since retirement planning includes long-term care, it’s important to understand how these tax deductions can help offset overall costs.
Long-term-care costs. You can deduct unreimbursed costs for long-term care as a medical expense if certain requirements are met. This includes eligible expenses for in-home, assisted living and nursing-home services.
First, the long-term care must be medically necessary. It may include preventive, therapeutic, treating, rehabilitative, personal care or other services. (See IRS Publication 502 for a full list of qualifying services.) The cost of meals and lodging at an assisted-living facility or nursing home is included if the main reason for being there is to get qualified medical care.