Smart Strategies to Manage Caregiving Expenses Effectively

Assessing the Situation

The first crucial step is to determine the exact amount required for caregiving expenses. Recognize that different family members will have varying capacities to contribute due to their individual financial obligations. Nevertheless, the primary concern should always be the well-being of your parents or loved ones. Even those who are unable to provide financial support can contribute in other meaningful ways.

In lieu of monetary assistance, consider allocating responsibilities such as driving your loved ones to appointments, helping with grocery shopping, housekeeping, meal preparation, and other tasks that fall outside the caregiver’s responsibilities.

Evaluate Your Loved One’s Finances

It is essential to assess the financial resources available from your loved ones themselves. If your parents have savings, investments, a nest egg, or insurance coverage, these assets can help alleviate the burden on the rest of the family.

In cases where they continue to reside in their own home, these funds can be utilized to hire a caregiver. Alternatively, if they need to transition to assisted living, selling their home can provide the necessary funds.

If the individuals in need of care are your parents, it is reasonable to assume that any financial support would ultimately benefit the children. This perspective ensures that the responsibility does not solely fall on the children’s shoulders.

Consult Professionals

Seeking guidance from a financial advisor or lawyer can provide insights into potential assistance options. If your loved ones do not possess significant financial means, they may qualify for medical assistance programs designed for in-home care or assisted living. Consulting with professionals can help you navigate the complex financial landscape and reach informed decisions.

A mediator or objective third party can also offer valuable input and help facilitate a final resolution. Their impartial perspective can prevent disputes and impasses, as resolving these matters independently might prove challenging.

Respect Your Siblings’ Choices

It is possible that some of your siblings may refuse to contribute financially. This should be understandable, especially if they are facing financial instability, such as unemployment, the arrival of a new baby, or struggling to make ends meet. It is important to refrain from judgment or belittlement.

For siblings who cannot contribute financially or can only offer a modest amount, explore alternative ways they can assist while still feeling involved and helpful. Engage in open conversations with them to find mutually agreeable ways for their participation. Avoid pressuring siblings who are unable to financially contribute towards caregiving expenses. Instead, strive to find common ground and reach agreements on alternative means of involvement.

Document Everything

Maintaining meticulous documentation of all financial transactions is crucial. Make this information readily accessible for all siblings to review and ensure that every expenditure is recorded. Transparency is key in managing money matters within families, and by keeping accurate records, you provide clarity on how each individual contributes and where the funds are allocated.

This approach fosters satisfaction among all siblings, assuring them that their contributions are allocated appropriately. By documenting receipts, tracking incoming and outgoing funds, and accounting for any remaining balance, you minimize the likelihood of disputes or accusations regarding mishandling of finances.

Consider a Medical Alert System

Investing in a medical alert system may bring peace of mind to all parties involved, ensuring your parents have immediate access to medical professionals in case of emergencies. These systems contain comprehensive medical information, including contact details for you and all your siblings. Acquiring a medical alert system is a small yet invaluable investment in caregiving that can potentially save lives.

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With planning, organization and advice from experienced tax professionals, you can reduce the frustration of tax prep and maybe even reduce your tax liability. We’ve collected a set of articles, IRS resources and other information to help you manage the tax implications of aging and caregiving.

5 Blog Articles to Help You Do Your Taxes

Here are 5 blog posts that answer common tax questions and may help you take advantage of every opportunity to reduce your tax liability. Always consult a tax professional for definitive advice.

1. General Tax Preparation Tips for Seniors and Family Caregivers

The best way to avoid a nasty surprise on your tax return – or a terse letter from the IRS – is to estimate what’s owed so you can make smart decisions about cash flow and take steps to qualify for more deductions and credits. But you may have questions about how to do that. Should I prepare the return myself or get professional support? What information do I need to make tax prep easier and more accurate? How do I file for an IRS extension? Get answers here.

2. Are medical alert devices deductible?

IRS guidelines don’t expressly mention medical alert systems like Lifeline, but your system might be deductible depending on your circumstances. Learn more.

3. Can I claim my elderly parent as a dependent?

To qualify for tax breaks for family caregivers, you first need to determine whether you can claim your loved one as a dependent. Once that’s established, you may qualify for deductions for elderly parent care and a dependent care tax credit.  Find out how.

4. How do I benefit from the tax breaks for family caregivers?

The costs of caring for an aging loved one add up quickly. The amounts covered by Medicare or insurance coverage can be lower than expected, and the ongoing expenses associated with managing a chronic condition are often higher than we estimate. Luckily, there are tax breaks for family caregivers that may potentially reduce the financial burden of care. See how to get them.

5. What medical equipment is deductible and do I qualify?

Wondering if it’s worth claiming medical expenses for equipment on your taxes? The answer is yes! Researching deductions for medical equipment used by yourself, your spouse or another person in your care is worth the effort because, if you itemize, you may be able to reduce your tax bill.

Equipment from false teeth to oxygen tanks is on the IRS’ list of approved expenses. Check out the opportunities.

IRS Tax Tips for Family Caregivers

The IRS website is the definitive source for advice on federal requirements for dependents, tax credits and deductions. We recommend reviewing these publications for more information on eligibility and requirements:

• Dependents, Standard Deduction & Filing Information: IRS Publication 501
• Medical & Dental Expenses: IRS Publication 502
• Child & Dependent Care Expenses: IRS Publication 503

You can get free tax prep assistance from the IRS, too. Learn more about doing your federal return online for free directly on the IRS site. Get tax prep support for certain individuals from IRS-approved experts at no charge. Find more about free tax help.

Financial Tips for Family Caregivers and Seniors

Taxes are only part of the financial equation. We’ve got a library full of articles covering topics related to the financial aspects of aging and caregiving:

• Tips on Caring for Senior Parents Finances

• Living on a Fixed Income in Retirement

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This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Tax Tips for Family Caregivers and Older Adults appeared first on Lifeline.

Here are 3 steps to potentially reduce the financial burden of care:

1. Establish dependent status for your loved one.

To qualify for tax breaks related to your loved one’s medical expenses, s/he must qualify as a dependent. IRS criteria for claiming elder dependents changes regularly, so check the IRS.gov caregivers page and talk to your accountant to make sure your family member meets the requirements. Two important factors: You must have paid more than half of your parent’s support for the calendar year, and their gross income for the calendar year must be less than $4,300.

2. Identify and itemize eligible medical expenses.

With dependent status confirmed, you can start logging IRS-eligible medical and dental expenses, which include:

• Dental care, including dentures
• Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists and nontraditional medical practitioners
• Home health visits
• Inpatient hospital care or residential nursing home care
• Insurance premiums
• Prescription drugs, including insulin
• Special equipment or home improvements related to accessibility, safety and medical care
• Transportation to and from medical care

Unfortunately, you can’t deduct every penny spent. Expenses covered by insurance aren’t eligible. You can take deductions for a percentage of the amount determined by your income and other factors. That’s why it’s vital to discuss your situation with a tax professional, and perhaps engage them to prepare your return. Learn more about deductions from the IRS:

• Dependents, Standard Deduction & Filing Information: IRS Publication 501
• Medical & Dental Expenses: IRS Publication 502

3. Investigate additional tax credits and deductions for elderly parent care.

You may also qualify for the child and elderly dependent care tax credit for your spouse or a person who lived with you for more than half the year and wasn’t physically or mentally able to care for themselves. Get the details in IRS Publication 503.

Tax issues are complex and can be stressful, and it’s hard to know if you’re taking advantage of all available benefits. While working with tax experts does cost money, in many cases they end up saving you more – or helping you avoid costly errors – than you paid them. For that reason, always consult a tax specialist before claiming dependents and taking advantage of tax credits or deductions.

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This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Tax Tips for Family Caregivers appeared first on Lifeline.

Is Medical Equipment Tax Deductible?

Wondering if it’s worth claiming medical expenses for equipment on your taxes? The answer is yes!

Researching deductions for medical equipment used by yourself, your spouse or another person in your care is worth the effort because you may be able to reduce your tax bill.

The IRS allows taxpayers who itemize to potentially deduct the amount of medical and dental expenses that is more than 7.5% of their adjusted gross income on Schedule A (Form 1040). If you take the standard deduction, you cannot claim medical equipment or other health-related deductions.

Learn more: What Medical Equipment is Tax Deductible?

Are Medical Alert Devices Tax Deductible?

If you’re trying to figure out if you can claim a medical alert system on your taxes, the answer is: Probably. The only way to get a definitive answer is to consult with a tax professional like your accountant, tax attorney or financial advisor. That’s because IRS guidelines don’t expressly mention medical alert systems like Lifeline.

However, depending on your circumstances and specific medical alert system, a tax pro can help determine if a medical device used by you, your spouse or another qualified dependent can be claimed as:

• A medical equipment expense prescribed by a doctor.
• A capital expense for “special equipment” installed in your home mainly to support medical care for you, your spouse or your dependent.
• A medical expense for systems that store medical information in a computer data bank and retrieve and furnish the information upon request to an attending physician.

Qualifying medical expenses for tax deductions are helpful tax breaks for family caregivers and older adults that may help reduce the financial impact of caregiving or help manage the cost of aging. Consult a tax professional and IRS Publication 502 for the most current information on eligible medical expense deductions.

Tax issues are complex and can be stressful, and it’s hard to know if you’re taking advantage of all available benefits. While working with tax experts does cost money, in many cases they end up saving you more – or helping you avoid costly errors – than you paid them. For that reason, always consult a tax specialist.

Learn more: Tax Tips for Family Caregivers and Older Adults

This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Are Medical Alert Devices Tax Deductible? appeared first on Lifeline.

Do I need tax prep help?

Deductions, credits and tax rules are confusing and preparing a tax estimate can be time-consuming. For many older adults and family caregivers, it makes sense to engage a tax professional or recognized tax prep software solution to do the work. The IRS’s Volunteer Income Tax Assistance (VITA) program offers free basic tax prep to people who generally make $57,000 or less, persons with disabilities and taxpayers with limited English language skills.

The agency’s Tax Counseling for the Elderly (TCE) program provides similar services for people age 60 and older, including consulting on pension and other retirement-related issues. Find free tax prep near you at IRS.gov.

What information should I gather?

Whether you hand off to a tax preparer, rely on software or use another method, you need to gather data and documentation on:

Income:

Social Security, annuity or pension payments; other income, estimated dividends and/or interest from investments, bank accounts and CDs; and capital gains or losses.

Non-Medical Expenses:

Mortgage interest, real estate taxes, state income tax paid the previous year, estimated tax payments made during the year, tax preparation fees, and miscellaneous expenses such as safe deposit boxes or investment fees, and charitable contributions. These expenses may qualify for deductions or credits.

Medical and Dental Expenses:

Out-of-pocket payments for doctors, dentists, labs, physical therapy, medical equipment, prescription drugs, and premiums for Medicare and supplemental insurance and miles driven for medical care. You may be able to claim deductions for these medical expenditures.

Plug these dollar amounts into your estimate software or tax preparer’s organizer to get a preliminary picture of your tax situation.

How can I tell if there’s enough money to pay the tax due?

If you or your loved one owes money, talk to an accountant about how you can reduce liability, including making certain purchases before tax year-end.

Once you know the final estimate of tax due, review bank accounts and cash flow projections to determine if there will be enough money to cover the bill. Your tax pro and banker or financial advisor can help you explore options to increase cash on hand.

While you can file for an extension, that doesn’t mean you can put off payment. Any estimated tax due must be paid by Tax Day (usually April 15) to avoid stiff penalties, including a one-time penalty, accrued interest and monthly fines on the amount due for each month your return is tardy up to 25%. Get more information on how to file a tax extension at IRS.gov.

Even if you don’t have time to do a projection for the prior tax year, you can get ready to do one for this year. Follow these steps to have the data and documents you need to prepare a projection later this year. Good luck!

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This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Tax Preparation Tips for Seniors & Family Caregivers appeared first on Lifeline.

Researching deductions for medical equipment used by yourself, your spouse or another person in your care is worth the effort because you may be able to reduce your tax bill.

The IRS allows taxpayers who itemize to potentially deduct the amount of medical and dental expenses that is more than 7.5% of your adjusted gross income on Schedule A (Form 1040). If you take the standard deduction, you cannot claim medical equipment or other health-related deductions.

Qualifying Medical Expenses for Tax Deductions

Once you or your qualified dependent meets the medical deduction threshold, you can investigate the approved medical deductions and credits that may apply to you. You may be able to count as medical expenses the amount you pay for:

• Artificial limbs and teeth
• Braille books and magazines
• Crutch rental or purchase
• Equipment that displays the audio part of television programs as subtitles for persons with a hearing disability
• Eyeglasses, contact lenses and related equipment
• Hearing aids and batteries, repairs and maintenance needed to operate them
• Medical supplies such as bandages
• Oxygen and oxygen equipment to relieve breathing problems caused by a medical condition
• Telephone equipment for a person who is deaf, hard of hearing, or has a speech disability, including teletypewriter (TTY) and telecommunications devices for the deaf (TDD)
• Wheelchairs used for the relief of a sickness or disability
• Wigs purchased on the advice of a physician for the patient’s mental health

Personal medical alert systems, like Lifeline, may be deductible with a prescription from a doctor. If you do not have a prescription, you might be able to claim the system as a capital expense for special equipment installed in your home for the main purpose of supporting medical care for you, your spouse or your dependent.

Additionally, depending on the product you use, you may be able to claim the Medical Information Plan deduction for “amounts paid to a plan that keeps medical information in a computer data bank and retrieves and furnishes the information upon request to an attending physician.”

With so many possible deductions for medical equipment, it’s smart to determine how itemizing could potentially help you cut the cost of aging or reduce the financial burden of being a caregiver. It’s always best to consult with a tax professional and IRS Publication 502 for the most current list of eligible deductions to determine if you qualify.

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This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Remember to always consult professionals when you have specific questions about any financial matter.

The post What Medical Equipment is Tax Deductible? appeared first on Lifeline.

1. Deductions for Medical and Dental Expenses
2. The Child and Dependent Care Tax Credit

Like any great opportunity, some rules apply:

Claiming an Elderly Parent, Spouse or Other Relation as a Dependent

Before you can take advantage of these deductions and credits, the person in your care must qualify as a dependent. The IRS has very specific criteria that you and your relative must meet, including:

Dependent Status

Neither the taxpayer nor the care recipient can be claimed as dependents of other taxpayers. This includes your spouse if filing jointly. Your loved one must also be a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada, Mexico, the Canal Zone or the Republic of Panama.

Relation to Dependent

You can claim your parents, stepparents, grandparents, other direct ancestors and even your in-laws – whether or not they live with you. Cousins, foster parents and other seniors meet the standard only if they live with you all year as a member of your household.

Financial Requirements

Dependent status is established if your loved one’s annual gross income was below $4,300 (excluding Social Security and pension payments) and if you paid more than half of your parent’s support for the calendar year.

The full set of conditions is laid out in IRS Publication 501. The document includes “tests” to help you determine dependent eligibility. For a definitive decision, consult a tax expert.

Tax Tips for Caregivers

Once you claim your loved one as a dependent, other tax breaks become available. To benefit from the dependents tax deductions and the elderly dependent care tax credit, you need careful accounting and documentation of expenses you paid for your dependent. This is especially important if more than one person is contributing to your loved one’s care. Knowing who paid what is critical to determining who’s eligible to claim the dependent.

Claim Tax Deductions for Elderly Parent Care

Many out-of-pocket medical, dental and related costs can be deducted from your tax bill, including:

• Care provided by doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists and nontraditional medical practitioners
• Home health visits
• Inpatient hospital and residential facility care
• Prescription drugs
• Some home medical equipment and renovations

Medical alert systems like Lifeline may also qualify. IRS Publication 502 details medical and dental deductions. A tax professional can verify your eligibility.

Claim the Tax Credit for Elderly Parents and Others Living with You

The Child and Dependent Care Credit allows you to write off care expenses if you have to pay someone to watch your loved one while you work. To qualify, you (and your spouse if filing jointly) must have earned income. This means that you work for someone else or are self-employed.

Additionally, the care recipient must be unable to safely care for themselves – and have lived with you for at least half a year. The total expenses used to calculate the credit may not be more than $3,000 per dependent. Expenses are eligible if the primary reason the purchase was made was to ensure the individual’s well-being and protection. IRS Publication 503 includes more detailed explanations and “tests” to help you determine eligibility. A tax pro can confirm your calculations.

Tax issues can be complicated, and many of us feel anxious about making a mistake or overwhelmed by the requirements. But figuring out dependent status and calculating credits and deductions can help lower the emotional and financial costs of care.

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This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Tax Breaks for Family Caregivers: Deductions and Credits appeared first on Lifeline.

“Elder financial abuse is happening in America at an alarming rate – if it was reported as often as it happens,” asserts Syracuse-based CPA and financial planner Ted Sarenski.

Why does elder fraud happen?

There several reasons seniors are particularly vulnerable to financial frauds, chief among them:

Assets

“We have largest and wealthiest population of seniors ever as the Boomers age into the senior population,” explains Chicago area author Glynnis Walker, whose own mother was an elder fraud victim. “Elderly women are particularly vulnerable because they often outlive their husbands and end up with funds from investments, real estate and life insurance and they are lonely.”

Loneliness

A landmark study from the University of California, San Francisco found that more than 43% of seniors regularly felt lonely. And loneliness has been shown to impair “executive functions” like reasoning and decision-making, which have a huge impact on our ability make smart choices and identify fraudulent and exploitative tactics.

Trust

“Trust increases as people age, especially if they are getting attention from someone after being lonely for a long time,” Sarenski says. We’re more likely to trust people we shouldn’t, avoid asking important questions, and ignore suspicious activities. We also put more trust in people we think we “should” trust – like lawyers, financial advisors, neighbors and family members – and unknown scammers.

This perfect storm makes older adults lucrative and easy marks for scheming opportunists.

How does elder financial abuse work?

People who want our money have lots of ways to get it.

According to the American Council of Fraud Examiners, scammers most frequently rip off seniors via phone calls, followed by email.

These scammers call or email from an official-sounding organization alerting seniors to an urgent matter – often related to funeral insurance, medical expenses, Medicare or prescription drugs – that requires a payment of some kind. They ask for a wire transfer or credit card number to resolve the issue immediately. Good scammers sound authoritative and their requests are just plausible enough to be possible, which makes them unusually successful at tricking.

But it’s not just faceless strangers.

“The majority of elder abuse comes from a relative of the victim,” Sarenski points out. “It appears a family member is helping out when they are really taking advantage of their elderly relative. Non-relative abusers are often caregivers or neighbors who, again, appear to be helping.”

Walker’s mother, who had Alzheimer’s, was exploited people she knew, including neighbors and an attorney. They convinced her to rewrite her will and cut her daughter out of her life. You can read the whole story in Stealing Joy: A True Story of Alzheimer’s, Elder Abuse, and Fraud.

How can I avoid being a victim of elder fraud?

While wily criminals are always finding new ways to hide their malicious activities, there are a lot of ways to make it harder for them. Undertake as many of these senior fraud protections as possible:

Safeguard assets

Safeguard assets by creating different levels of security for different accounts. “Put most of the liquid assets in one account,” Walker advises, and “make sure their are two signatories. I should never should have put my mother’s name alone. It made her a target.” Having a second name on the account can be a deterrent to criminals, who realize someone else is getting the statements and has to approve large payments.

Set controls and alerts

Set controls and alerts to stay on top of financial accounts, Sarenski suggests. Establish a maximum for cash withdrawals so anything over that is denied. Set similar limits for check and credit card transactions, and request notification when transactions exceed those. Bonus tip: Sign up for mobile, phone or email fraud alerts. Banks are great at flagging repeated payments to the same vendor, subtle patterns in spending and other potentially malicious accounts.

Monitor accounts

Monitor accounts each month to spot unusual transactions and identify suspicious patterns.  Online and mobile banking is extremely helpful, especially for parents and children who live far apart. If your parent has cognitive issues, Walker advocates getting copies of all credit card statements, bank account statements bills sent to you so you can monitor activity. Bonus tip: Keep account numbers safe from wandering eyes by blacking out all but the last four digits on paper statements.

Perform background checks

Perform background checks and thorough investigations of anyone who is going to provide any type of care or housework for their elderly parent, Sarenski says. The same goes for attorneys, accountants and other professionals. Even if you can’t afford a formal check, look at online reviews, contact the Better Business Bureau and ask around your community.

Pay attention to scams alerts

Pay attention to scams alerts from local law enforcement, government and senior service agencies. And make sure your parents and children know about them, too. Bonus tip: The FTC keeps a running list of scams on its website. Familiarize yourself with tactics so you’re better able to avoid falling prey to them.

Don’t give out your account numbers

Don’t give out your account numbers on the phone or via email or text to anyone you aren’t sure about. If you get a call or an email requesting this information, call your local police station or sheriff’s office. They can tell you if this is part of a known scam.

Report suspected elder fraud

Report suspected elder fraud to the bank, financial institution or credit card company as soon as you spot it. Representatives will help you protect your account from further charges and suggest next steps. You may also contact law enforcement, who can tell you what information is needed to bring charges. “Seniors often don’t report the crimes because they are embarrassed or because they don’t want to lose their control over their lives,” Walker laments. But reporting is an important step to getting your funds restored.

Get involved

Though challenging, it’s critical for adult family members step in as soon as elder fraud or exploitation is detected. “Look for proof that you could bring to authorities,” Sarenski says. “The senior [may] not be the person to rely on to tell you of the elder financial abuse for two reasons: they are embarrassed that they have been taken advantage of [or] they feel physically and mentally incapable of affecting change.”

Put these senior fraud protections in place address the causes of elder financial abuse and mitigate your or your parent’s risk of being taken advantage of.

This information is not intended as a substitute for professional financial, accounting, tax or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.

The post Financial Frauds: How to Reduce Seniors’ Rip-Off Risk appeared first on Lifeline.

Tips for Managing Healthcare

Tip #1: Use Email and Apps

Realizing caregivers’ reliance on mobile apps and digital communications, “health systems have responded with patient portals for electronic communication and record review,” says Andrew Duxbury, professor of the Division of Gerontology, Geriatrics and Palliative Care at the University of Alabama-Birmingham.

“Most boomers and younger who are used to email are now using it more and more to communicate and coordinate with physicians and other health care providers for the elders in their families.” Use these cloud-based options to schedule appointments, check test results, request prescription refills, and communicate with the care team.

Action Step: Complete a HIPAA release form to enable the care team to speak with you about your parent’s condition.

Tip #2: Share Your Knowledge

“Make a list of all the things you see going on with parent — everything that concerns you — and share that with the doctor,” advises Richard M. Dupee, clinical professor of medicine at the Tufts University School of Medicine and chief of the Geriatrics Service at Tufts Medical Center. “This helps the doctor to focus on kinds of issues that make a difference in quality of life for your parent, not just cholesterol and blood pressure.”

Action Step: If you accompany your parent, ask for additional time when you make the appointment. Otherwise, arrange to email your thoughts and discuss via phone.

Tip #3: Integrate Technology

From wearables that track activity and vital signs to interactive systems that transmit critical data to healthcare providers and send reminders to seniors, patient-focused technology helps your parent remain more independent. Many connected healthcare devices are covered by insurance or eligible for tax deductions.

Action Step: Investigate technology like medical alert systems, medication dispensing systems and other options.

Tip #4: Request a Second Opinion

It may feel disrespectful, but another viewpoint is especially important when you don’t get a straightforward diagnosis or when it has a big impact on your parent’s quality of life. You can also ask for second opinion when a treatment is experimental, “off-label,” or risky. Don’t worry that the physician will take this personally, Dupee counsels: “Good internists will say ‘of course.’”

Tip #5: Negotiate Costs

It might surprise you that costs for medical procedures vary widely from facility to facility and state to state. Negotiating — even if your parent has terrific insurance — can help reduce co-pays and other out-of-pocket expenses.

These ideas could help you take advantage of new opportunities for managing healthcare for aging parents.

The post 5 Tips for Managing Healthcare for Aging Parents appeared first on Lifeline.

This isn’t exactly news for most adults who care for their aging parents. But Cooper points out that it is possible to lighten the emotional and financial load that comes with caregiving by enlisting help from financial pros, technology, and other caregivers.

5 Tactics You Can Try to Help Reduce the Cost of Caregiving:

1. Tap rebates and cost-reduction programs:

Ask your parent’s doctor about drug and device rebates and pharmaceutical company programs that can reduce the cost of prescriptions and supplies. A few dollars off may not seem like much on one item, but if your parent is like most older folks, there’s a long list of medications and supplies to be purchased. The savings start to be significant. Medicare maintains a list of companies offering pharmaceutical assistance programs.

2. Secure additional financial assistance:

Many government agencies and nonprofits offer financial help to seniors and their families meeting a variety of criteria. Check with your local department of aging and at area senior centers for options, or refer to the U.S. Department of Health & Human Services’ Eldercare Locator under Financial Assistance.

3. Take advantage of tax credits and deductions:

This may be the only time you want to think about your taxes. You or your parents may qualify for cost-reducing tax deductions and credits, so ask your CPA about:

• The Medical Expense Deduction: “Qualifying costs, other than just hospital and doctor bills, often amount to a much larger medical deduction than expected,” explains Martinsville, NJ-based CPA Gail Rosen. “Other items you should take into account can include health insurance payments, transportation, therapists, eyeglasses, dental work, weight loss programs if undertaken for a disease diagnosed by a physician, smoking-cessation programs, etc.” You can claim this deduction when unreimbursed medical costs exceed 10 percent of your adjusted gross income. “However, a more favorable 7.5 percent of adjusted gross income threshold applies if your or your spouse reached age 65 before year-end,” she adds.  Get more information on deducting medical expenses and the 7.5 Percent Rule in IRS Publications 501 & 502.
• Long-Term Care Expenses: Some expenses related to long-term medical care and insurance premiums can be taken as medical expenses.
• Renovation Costs: Costs associated with renovating your or your parent’s home – like wheelchair ramps or bathroom grab-bars and handrails – may be allowed as medical expenses.
• The Dependency Deduction for Aging Parents: You can get additional deductions if your parent qualifies as a dependent. “He or she need not live with you as long as you provide more than half their support and they [otherwise] qualify as your dependent,” Rosen notes. Learn whether you can claim your parent via the Who Can I Claim as a Dependent worksheet from the IRS.
• Child & Dependent Care Tax Credit: This credit applies if you pay for a parent’s in-home or out-of-home care to be able to go to work or look for a job. The maximum credit for an individual is $3,000, and $6,000 for joint filers. Get more information from IRS Topic 602.

4. Invest in peace of mind:

Wearables and medication dispensing systems take a lot of the worry out of caregiving. Medical alert systems give seniors immediate access to call for help with the push of a button – and devices with automatic fall detection can detect falls and call for help even without a press. Services range from $539 to $659 per year. Medication dispensers help you and your parent use the right medications at the right time, avoiding complications from dosing errors, emergency medical care and additional prescriptions.

Bonus: Systems that maintain medical information may be deductible as a medical expense, so check with your CPA.

5. Share the responsibility:

You don’t have to go it alone. In addition to working with a CPA or CFP, engage other family members to help out. This can free up time for you to tend to your own well-being, but it can also lower the stress related to finances. Investigate a multiple support agreement between you and your kin. “Any group member providing more than 10 percent of the support can qualify to claim the exemption,” Rosen says. Learn more about multiple support agreements on IRS Form 2120.

Tip: Even if you’re the only family member involved, buy some time for yourself by hiring respite care, using a drop-in or day-care facility or coordinating with a nonprofit or faith-based visitation program.

The most important advice is to get professional help, “an objective third party to help guide you as this is a highly emotional and highly fragmented area,” says Cooper. Look for bonded caregivers and certified public accountants and certified financial planners who specialize in eldercare and gerontology – they’re the most familiar with the financial and emotional costs of caregiving.

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