I provide in-home nurses' aides for my parents. Can I deduct these expenses on my tax return?
I provide in-home nurses' aides for my parents. Can I deduct these expenses on my tax return?
Well, you can if your parents qualify as your dependent. You see, you can deduct medical expenses for you, your spouse, or your dependents. If they do, then you can deduct your expenses, subject to the 7.5% floor. What is this floor? You may deduct only expenses exceeding 7.5% of your adjusted gross income. This is total expenses, not each single expense. So if you had an adjusted gross income of $20,000 and had unreimbursed medical expenses of $1,835:
| Unreimbursed expenses | $1,835 |
| Less: 7.5% of $20,000 | $1,500 |
| Medical expense deduction | $335 |
How do you determine if your parents are dependents? There is a 5-part test outlined on page 411 of J. K. Lasser's Your Income Tax 2007. But, simply put, to examine if your parents are dependents:
- Is the person a relative?
- Does he or she have gross income of less than the amount of the personal exemption?
- You either contribute more than half of the dependent's support or contribute more than 10% and, together with others, contribute more than half.
- The dependent is a citizen of the United States.
- Your married dependent does not file a joint return.
This is a very brief outline; please be sure to look in the book for a complete review.
