bharatbhasha.com
Free Articles  >>  Business And Finance >>  Page 334  >> 

Qualify For Medical Deduction For Using An Assisted Living Facility In 2013







Many retirees will end up in a nursing home when they need constant assistance. But before that, they may choose to live in an assisted living facility (ALF) for convenience, security and comfort. To deduct costs for an assisted living facility, you must make sure the care you get there qualifies for it. Let's see what care qualifies.

For living costs to be deductible as an itemized medical deduction on your schedule A of your income tax, they must satisfy the qualified long-term care costs requirements. Those requirements are that care costs are "necessary rehabilitative services, maintenance or personal care services that are

1. required by a chronically ill individual, and

2. provided pursuant to a plan of care by a licensed health care practitioner."

Because a nursing home specializes in qualified long-term care, you can deduct its cost as an itemized medical deduction on your federal income tax. But not all individuals who use an AFL fulfill the long-term care requirement for deductibility.

To deduct your ALF costs you must first qualify as a "chronically ill individual". You - as a resident - will, if within the previous 12 months, a licensed healthcare practitioner certifies that the you meet one of two descriptions under IRC § 7702B(c)(2):

* You are unable to perform at least two activities of daily living (ADLs) without substantial assistance from another individual for at least 90 days due to a loss of functional capacity. ADLs are eating, toileting, transferring, bathing, dressing, and continence; or,

* You require substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

The Internal Revenue Code doesn't define what a 'plan of care' is. Though nursing homes are required by federal law to prepare such a plan for each resident, most assisted living facilities also prepare a plan of care. But in any case, the plan must be prepared by a licensed care practitioner.

Satisfying either of these two requirements qualifies as personal care services under the statute so AFL costs can be deducted - but only to the extent that they are not reimbursed by government benefits or your insurance.

Be sure to add up all your qualified medical expenses, including the qualified long-term care and insurance premiums. But only their total value in excess of 10% of your adjusted gross income (AGI) actually contributes to the medical deduction. For those 65 or older by the end of 2012, you can continue using 7.5% of your adjusted gross income threshold for itemizing medical deductions but only through 2016.

If you don't meet the requirement, you can still deduct the percentage of the ALF costs attributed to nursing services which is typically around 35% of all AFL costs. Request the AFL to provide a breakdown of costs for you for your convenience.


About Author Shane Flait :

Shane Flait helps you with your financial legal, tax, and retirement goals. Get his FREE report on Managing Your Retirement => <a href="http://www.easyretirementknowhow.com/FreeReportandSignUp.htm" target="_blank">http://www.easyretirementknowhow.com/FreeReportandSignUp.htm</a> Read his ebook: 'Wise Way to Financial Independence' => <a href="http://www.easyretirementknowhow.com/WiseWayGate.htm" target="_blank">http://www.easyretirementknowhow.com/WiseWayGate.htm</a>


Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/finance-and-business.php/465714


Article Added on Tuesday, June 3, 2014
LD
Other Articles by Shane Flait

Get Non Itemized Medical Deductions With A HSA Before Medicare Eligibility
If you're not yet eligible for Medicare (age 65) you can get a tax break paying for you medical costs. But you need to use Health Savings Account (HSA) in conjunction with a high deductible health insurance plan to do so. Let's see how it works... Generally, the higher your deduction is - i.e. the amount you must pay out of your pocket before your insurance plan kicks in - on an insurance plan, the smaller is the premium you pay. This concept applies to health insurance, too. But if you...

2013 And 2014 Deductions And Exclusions For Your Long Term Care Insurance
As an incentive to take responsibility for your own long term care, the government (HIPPA) lets you deduct the insurance premiums you pay for qualified long term care (LTC) expenses while excluding their insurance reimbursements for expenses you incur from your taxable income. These deductions are limited but increase according to your age. They're also indexed for inflation. Here are the premium deduction limits for 2013 and 2014... A general rule of taxation is that when you deduct...

Getting Acquainted with Long Term Care Insurance Option
One complication of 'Old Age' is the need for long term care (LTC). You need LTC when you can no longer handle simple daily activities (like dressing, toiletry, moving, eating, etc) by yourself. Help with your LTC needs can take place at your home, at an assisted living facility, or in a nursing home. Generally, once LTC starts, it'll continue as long as you live; and it's costly. One way to handle LTC costs is with LTC insurance. -The cost of long term care : LTC is expensive. It depends...

Retirees Should Try To Deduct All Itemized Medical Expenses
You can lower your income tax if you can itemize your deductions so they add up to more than the standard deduction given to everyone. The two major itemized deductions are typically mortgage interest paid and state income taxes withheld. Retirees typically have little or no mortgage interest and a lower income than average so their state income tax is not that much. But their medical expenses are greater due to age-related issues. So, they must rely on itemizing all their medical expenses...

Minimize Exposure To The 2013 Income And Investment Tax Rates
Our income is taxed in a progressive manner. As your income increases, it slips into higher tax brackets where it's taxed at a higher rate. But before your income is subject to these tax brackets, it must exceed your exemption and standard deduction. Otherwise you pay no tax. *Tax-free thresholds and filing status: For 2013, your personal exemption is $3,900 no matter what your filing status is. If you are filing single then your standard deduction is $6,100; it with your personal...

Two Tax Breaks For Paying For Long Term Care Of Spouse At Home
It's not uncommon to pay someone $15,000 per year to take care of your dependent spouse or parent. Federal taxes rules allow you to take either a tax credit or an itemized deduction for a portion of those expenses. Here's the deal... *A tax credit saves you more tax than a tax deduction: A dollar of a tax credit reduces the tax you owe by one dollar. On the other hand, a tax deduction just reduces your taxable income. So less taxable income means a smaller tax. In this case one dollar of...

2011 and 2012 Deductions and Exclusions for Your Long Term Care Insurance
HIPPA provides for deductibility of qualified long term care (LTC) expenses and excludes from taxable income your qualified long term care benefits. This is provided to you as an incentive to take financial responsibility for your long term care. As you age, you get higher deduction limits for LTC premiums payments you make. This helps retirees. Let's see what the tax advantages are. It's generally a rule of taxation that when you're able to deduct insurance premiums, you're generally taxed...

Use A GRAT To Save On Gift Taxes To Your Kids
If you expect to have several million remaining in your estate, arrange to transfer some wealth while you're living in a way that triggers little or no gift tax. You can use a grantor retained annuity trust (GRAT) to do so. A GRAT is an irrevocable trust set up for only a certain term of years and designed to transfer the appreciation on assets contributed to it with little or no gift-tax consequences. Simply put, you fund your GRAT and begin receiving back annuity payments from it during...

How to Minimize Income Tax On IRA to Roth Conversions
The prime benefit of a Roth IRA is that its earnings and withdrawals from are tax free. This benefit remains true for your Roth inheritance beneficiary although he'll have to make minimum required distributions (MRDs) - which you don't. And if that beneficiary is young, his Roth IRA growth can supersede his MRDs for a long time. But converting your IRA to a Roth forces you to pay income tax, and a large conversion can drive up the tax rates on it. Here's an example of how to keep that...

A QTIP Trust Gives Income To A Wife But Preserves Assets For Your Children From A First Marriage
If you have children from a previous marriage that you want to leave property to, but still supply income to your current spouse while she lives, then a QTIP trust may be the way to go. It allows you to ensure your legacy to all your loved ones. Here's how it works... If you've remarried, your current wife may not be enthused about leaving assets to children of your first marriage after you die. So how do you leave assets that you want your current wife to use after you die, but yet...

Click here to see More Articles by Shane Flait
Publishers / Webmasters
Article ID: 465714
DELINK URL from Authors Bio
REMOVE Article
Tell A Friend
Leave A Comment!
Download this article in PDF
Report Article!
Search through all the articles:


460 Users Online !
Related Articles:
Latest Articles:
 
Business And Finance >> Top 50 Articles on Business And Finance
Category - >
Advertising Advice Affiliate Programs Automobiles
Be Your Own Mentor Careers Communication Consumers
CopyWriting Crime Domain Names DoT com Entrepreneur Corner
Ebooks Ecommerce Education Email
Entertainment Environment Family Finance And Business
Food & Drink Gardening Health & Fitness Hobbies
Home Business Home Improvement Humour House Holds
Internet And Computers Kiddos and Teens Legal Matters Mail Order
Management Marketing Marriage MetaPhysical
Motivational MultiMedia Multi Level Marketing NewsLetters
Pets Psychology Religion Parenting
Politics Sales Science Search Engine Optimization
Site Promotion Sports Technology Travel
Web Development Web Hosting WeightLoss Women's Corner
Writing Miscellaneous Articles Real Estate Arts And Crafts
Aging


Disclaimer: The information presented and opinions expressed in the articles are those of the authors
and do not necessarily represent the views of bharatbhasha.com and/or its owners.


Copyright AwareINDIA. All rights reserved || Privacy Policy || Terms Of Use || Author Guidelines || Free Articles
FAQs Link To Us || Submit An Article || Free Downloads|| Contact Us || Site Map  || Advertise with Us ||
Click here for Special webhosting packages for visitors of this website only!
Vastu Shastra

Business eMail Hosting Provided By AwareIndia







Company IDS