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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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Currently I have hired a senior care agency to care for my

Resolved Question:

Currently I have hired a senior care agency to care for my wife in our home. I would like to treat this expense as a medical expense and take a tax deductions.

Q. What steps must I take to qualify my "in-home" senior caregiver expense as a tax deductable medical expense ?

As I understand the IRS Publication 502 (pg. 12 ) , I will need a letter from a doctor stating that my wife is 1) chronically ill individual 2) provides a plan of care which includes the hiring of caregivers but in my case not a nurse (RN). The caregiver(s) will need to provide substantial supervision to protected my wife from threats to her health and safety due to severe cognitive impairment. To me it means the caregivers must be by wife side at all times as she walks about the house. Prevent her from walking upstairs or outside, dispense medication as scheduled, help her shower, help her get out of the chair or bed, help her change clothes, change bedding and eat.

I am assuming her family doctor will not know all the in and outs of writing a letter(s) that will satisfy the IRS. As such the correct answer to my question will include either a form letter or a sample letter that I can give to her doctor to help him write/included all the necessary elements for the IRS to qualify my expense as a medical expense.

Background:

My wife's cognitive functions has degraded to point that I do not feel it is safe for her to be left alone. My wife is 76 years of age. Chronically ill, Eighteen years ago she was diagnose with Lupus which has taken a toll on her body. She would not be able to live alone for she no longer drives a car, shops, cooks or cleans the house. She needs help to shower. She is not stable on her feet and on her better day has problems walking more than 15 feet at a time.( she has falling 4 times at home in the last two months - two of her falls resulted in 911 calls and a trip to ER ). Some days she needs help getting out of her chair. Her mental state is not consistence. At times during the day she can appear to be normal but there are other times during the day especially at night she has the classic the signs dementia:

a) memory loss -- she may or may not know her street address or her phone number , or even the location of bathroom in her house
b) difficulty performing familiar task -- dial a phone or operation the TV system
c) language problems - - she can not find the right words for to describe a simple task ... if she is hot and wants the air conditioning adjusted to a lower temperature she is not always able to instruction the caregiver to lower the temperature.
d) poor judgment - - on several occasions she took her pillow and blanket waked out side at night to sleep by the pond or in the car.
e) medications - - on several occasion she taken double dose of her medications , a few times she has taken medication out of the prescription bottles and hid their contents. ( I can no longer trust her to take medications at the correct time or take the correct amount. All her medications are now under lock and key and disbursed by me or by the caregiver from the agency).
f) change in moods - - crying for no apparent reason and/or fearful of husband, son and caregivers.

Note: At this point in time I don't believe my wife has been officially diagnosed by her doctor as having dementia. However When my wife was questioned by the nurse in the hospital and at home she was not able to answer correctly simple questions related to the time of day and names of family members or her address. No sure if these observations were reported to her family doctor. If for some reason her doctor will not diagnose her as demented or severely cognitive impaired, what should I do? or who should I contact? Does the IRS does specify it has to be by a her family doctor or will any medical professional do?
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome and thank you for giving me the opportunity to assist you with your tax question.

 

You may take these caregiver expenses as deductible medical expenses if the following criteria is met:

 

To be deductible, a medical expense must be paid with after-tax, out-of-pocket
dollars. The expense must also be for treatment of a medical issue, not just for
maintaining good health. These expenses must be in excess of 7.5% of your adjusted gross income. Of course, if the caregiver provides housekeeping, cooking or other such services, that portion is not deductible.

 

Publication 502 is clear in that it specifically states:

 

Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are:

Required by a chronically ill individual, and


Provided pursuant to a plan of care prescribed by a li-censed health care practitioner.

 

Further, ANY licensed health care practitioner can certify that your wife meets either of the following descriptions.

 

She is unable to perform at least two activities of daily living without substantial assistance from an-other individual for at least 90 days, due to a loss of functional capacity. Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.

 

She requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

 

Based on the information contained in your question, it would seem the in-home care in your home is deductible as a medical expense.

 

Please let me know if you require further information or clarification.

 

Thank you and best regards,

Barb

Customer: replied 1 year ago.

Since I already have access to the IRS Publication 520 I was looking for something beyond a few statements taken from the IRS Publication. I was hoping to see actual examples of supporting documents to validate the tax deductions like letter submitted to the IRS by doctors description the medical conditions (cognitive impairment and the corresponding plan of care ).


 



to put it another way if i wanted a person to supply me a chair, I would need more than bare bone description of a chair but an actual picture of chair with a diagram showing details dimensions. Your answer was a bare bone IRS description lacking an actual example of a real letter from a doctor nor a real world plan of care ( the diagram showing details). To be fair the detailed answer would require more research on your part and in turn a higher level of compensation .... if you are able to supply the details and or examples I will be willing go up to $60, but as it stands now your answer falls short of what I was hoping to see.

Expert:  taxmanrog replied 1 year ago.
Welcome to Just Answers! The expert you requested is not online right now, so with your permission, I will try to assist you. I will do my best to help!

It has been my experience over the past 28+ years that you just need some documentation for your files when claiming this deduction. The doctor does not have to send anything to the IRS in advance of any questions. The IRS may not even question the deduction, but in the event they do, having a letter in your files that you can send to the IRS to confirm the medical expense will in all likelihood satisfy their questions.

The doctor can write a letter addressed to the IRS, but give it to you to keep in your tax files. The letter should be something as follows:

Date

Internal Revenue Service

(Appropriate Service Center)

Regarding: Patient Name

Date of Birth

Social Security Number

Dear Sir or Madam:

I am writing this letter to confirm the necessity of Home Health Care for my patient [name of patient], who has the following diagnoses relevant to this service: [list diagnoses]

This service is medically necessary for the following reasons: [list the reasons that you outlined above].

It will, or is reasonably expected to, prevent future injury, and to provide assistance to the patient in areas where she is unable to care for herself since the onset of this illness, condition, or disability. [List potential problems and the benefits of the health care provider]

It will, or is reasonably expected to, reduce or ameliorate the physical, mental, or developmental effects of an illness, injury, or disability. [Please provide details]

It will assist the individual to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the individual and those functional capacities that are appropriate for individuals of the same age. It will also reduce the chance of further injury and note the progression of the illness that might otherwise not be observed. [Please provide details.]

Please let me know if you require additional information from my records.

Yours truly,

Doctor’s Name


I believe that this is what you were looking for. If you have any questions, please let me know. If you have found this helpful, please rate me highly! I would appreciate it!

Thanks! Have a great weekend!

Roger
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 407
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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