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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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My mother is 89 and is going into a assisted living facility

Customer Question

my mother is 89 and is going into a assisted living facility next year. I read that I can deduct her stay in the ALF if I can get a letter from her doctor for cognitive impairment and/or needing assistance with 2 activities of daily living. I understand the letter must be written within 12 months prior to her admission. Her AGI last year was about $115,000. The assisted living will cost between $4000. to $5000 per month. May go up if her health decreases. Can you explain if she can get a tax deduction, will it pay for everything or part of her care? How much? Is there anything else that I need to do.
Submitted: 7 months ago.
Category: Tax
Expert:  emc011075 replied 7 months ago.

Hi. My name is ***** ***** I will be happy to help you.

You can deduct medical expenses over 7.5% (if 65 or older) of your AGI. In her case she can deduct medical expenses over $8625. Also, to deduct medical expenses she will need to itemize her deduction. Her standard deduction (given to everybody, increased by $1250 because of her age) for 2016 tax year will be $7550. If her medical expenses are more than $16,175, she will actually benefit from the deduction.

Depending on her tax bracket, a $1000 will reduce her taxes by about $250 (in 25% tax bracket). Let's assume that she will have 50K in medical expenses, out of which 34K will reduce her taxable income in addition to standard deduction. Her tax liability will be reduced by $8500.

But keep in mind that the deduction will not generate an additional refund, it only reduce or eliminate her tax liability, and refund what was withheld from pension or social security income.

Expert:  emc011075 replied 7 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

Customer: replied 7 months ago.
Hi, I already responded with additional information to the assistant and she wrote the tax advisor would be contacting me with further information.
Expert:  emc011075 replied 7 months ago.

Ok. Do you have any questions? How can I help you?