It’s that time of year again! Whether you’re happy expecting a refund or dreading the payment you will have to make to the IRS, tax season is right around the corner. Tax season can be a stressful time, especially if you care for someone with a disability! As a caregiver myself, I’d prefer not to bring out every medical receipt and any other receipt used to care for my loved one but it’s inevitable.
As a caregiver, remember- it’s YOUR responsibility to file.
Technically, since you are the one caring for the person with a disability, you would be considered the head of the household. Whether you’re a parent, grandparent, or a relative, your loved one can be classified as your dependent. Filing your taxes is the law, whether it’s beneficial or not. Owing the IRS is better than the penalty that not filing altogether. Just remember, with the right credits and deductions, filing taxes for you and your loved one can be a ball in the park.
Have you heard of the Child and Dependent Care Credit?
There are many tax breaks and credits available if you are a caregiver. You may qualify for a $500 credit if your disabled loved one is considered your dependent. Just make sure that you’ve supported the dependent for at least half ot the year. The Child and Dependent Care Credit is also a great credit that can be utilized. Your caregiving expenses can be tax deductible.
You might be confused on how to move forward if you are paid via Medicare.
On January 3, 2014, the Internal Revenue Service issued Notice 2014-7, 2014-4 I.R.B. 445. Notice 2014-7 provides guidance on the federal income tax treatment of certain payments to individual care providers for the care of eligible individuals under a state Medicaid Home and Community-Based Services waiver program described in section 1915(c) of the Social Security Act (Medicaid Waiver payments).
We’ve offered a copy of this notice for your own benefit to download and have in hand!
Don’t get overwhelmed!
Juggling finances and caring for your loved one can make you feel as if a lot of pressure is on you. Do not worry too much, where you’re neglecting yourself! Be sure to maintain self care. Some great ways to destress is yoga, reading, or a hobby that you enjoy.