You might be able to deduct a part of caregiver costs attributable to medical expenses.
Please see for reference IRS publication 502 - www.irs.gov/pub/irs-pdf/p502.pdf
You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.
You can include in medical expenses amounts paid for qualified long-term care services - necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services - that are:
-- Required by a chronically ill individual, and
-- Provided pursuant to a plan of care prescribed by a licensed health care practitioner.
Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment).
A qualifying relative for purposes of medical expenses deduction is a person
Who is your:
Son, daughter, stepchild, or foster child, or a descendant of any of them (for example, your grandchild),
Brother or sister, or a son or daughter of either of them,
Father or mother, or an ancestor or sibling of either of them (for example, your grandmother, grandfather, aunt, or uncle),
Stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law, or
Any other person (other than your spouse) who lived with you all year as a member of your household if your relationship did not violate local law,
Who was not a qualifying child of any taxpayer for 2009, and
For whom you provided over half of the support in 2009.
So far - if these conditions are met - you may claim expenses paid for your mother regardless if she is your dependent.
As for the IRA distribution - if you total unreimbursed medical expenses are more than 7.5% of your adjusted gross income - you might be eligible to use an exception to the 10% additional tax for early distributions.
However - generally - the distribution would still be added to your taxable income.
Let me know if you need any help.
Edited by LEV on 7/12/2010 at 8:31 PM EST