Last Minute Tax Tips
We’re almost done with tax season! Below some last minute tips on various real situations for consideration.
— Are social security benefits taxed and how is that determined?
The answer is…sometimes. First of all, some taxation of social security income is dependent on state laws. So where you live may determine some of your tax liability. Secondly, if you have any additional income (“provisional income”) may also effect your tax liability. Generally, if your income is below $25,000 if single or $32,000 if married and filing jointly, your social security benefits are tax-free.
— If I care for my elderly parents in my home, is the money they give me to pay for household expenses taxable to me?
Money that your older parents give you to offset their expenses isn’t taxable to you. According to the IRS: “The amount is treated as support provided by your parents in determining whether your parents are your dependents.”
— If my elderly mother has dementia and I cash her social security checks and use the money to pay for her care, how will that effect my taxes?
Your parent’s social security benefits aren’t taxable to you. You should consider social security benefits used for your parent’s support as “support provided by your parent” when determining whether you provided over one-half of your parent’s support to claim him or her as a dependent.
–When can I deduct my parent’s medical expenses?
Qualified medical expenses are generally medical and dental expenses paid to a care provider. A taxpayer can deduct the medical expenses paid on behalf of a parent if the taxpayer pays over half the support of the parent. There is no requirement that the parent be a dependent. For both 2017 and 2018, medical expenses must exceed 7.5% of adjusted gross income to be deductible.