Tax Planning For Caregivers Supporting Elderly Parents

Caring for an aging parent is an act of love—but it can also bring unexpected financial responsibilities. Between medical bills, household support, transportation, and time away from work, many caregivers find themselves carrying significant costs. Fortunately, the IRS offers several tax benefits that can help ease the financial burden. Understanding which deductions and credits you qualify for can make a meaningful difference when tax time arrives.

1. Determine Whether Your Parent Qualifies as a Dependent

One of the most valuable tax advantages for caregivers is the ability to claim an elderly parent as a dependent. To qualify:

• Your parent must be a U.S. citizen or resident.
• You must provide more than half of their total financial support.
• Their gross income must generally be below the annual IRS threshold (Social Security often doesn’t count).

If they qualify, you may be able to access additional tax breaks designed specifically for dependent care situations.

2. Use the Credit for Other Dependents

Caregivers who claim a parent as a dependent may be eligible for the Credit for Other Dependents, worth up to $500. It’s not a huge amount, but every dollar matters—especially when caregiving expenses add up quickly.

3. Deduct Medical Expenses You Pay Out of Pocket

If you itemize deductions, you may be able to deduct medical expenses you paid for your parent, even if they don’t live with you. Qualifying expenses include:

• Doctor visits and hospital care
• Prescription medications
• Long-term care services
• Health insurance premiums
• Medical equipment and supplies

Your combined medical expenses (including your parent’s) must exceed 7.5% of your adjusted gross income to be deductible.

4. Don’t Overlook Long-Term Care Insurance Premiums

Premiums for your parent’s long-term care insurance may also be deductible, depending on age-based IRS caps. Many caregivers miss this deduction simply because they don’t realize it exists.

5. Explore the Dependent Care Credit

If your parent is physically or mentally incapable of self-care, you may qualify for the Dependent Care Credit for expenses related to adult day programs, in-home aides, or similar services. This credit can offset a meaningful portion of what you spend to ensure your parent is cared for while you work.

6. Track Every Expense Throughout the Year

Caregiving often involves dozens of small expenses—from mobility aids to fuel for appointments. Keeping good records helps ensure you get the tax benefits you’re entitled to. A simple spreadsheet or note-taking app works, but saving receipts and documenting support percentages is essential.

7. Get Professional Guidance

Tax rules for caregivers can get complicated—especially when support between siblings, medical deductions, and dependent rules overlap. A qualified tax professional can help you avoid mistakes and maximize your tax savings.

Need Help? Mytax.dog Makes Caregiver Tax Planning Easy

Caregiving is already stressful—your taxes shouldn’t be. Mytax.dog specializes in simplifying complex situations like caring for elderly parents. Whether you need help determining eligibility, optimizing deductions, or filing with confidence, their tax pros are ready to support you every step of the way.

Save time, reduce stress, and make sure you’re getting every tax benefit you deserve with Mytax.dog.

‍