Assisted living can be expensive, and there are several ways to pay for it. Some families use personal savings or investments to cover the cost of assisted living, while others rely on long-term care insurance or government programs such as Medicaid. In some cases, veterans may be eligible for assistance through the Veterans Administration.
Assisted living expenses can vary depending on the community and the level of care required. Some common expenses associated with assisted living include room and board, housekeeping, meals, transportation, medication management, and personal care services such as bathing and dressing.
The short answer is that it depends. In general, the IRS considers medical expenses to be tax deductible if they exceed a certain percentage of the taxpayer’s adjusted gross income (AGI).
According to the IRS, medical expenses are defined as “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” This includes expenses such as doctor visits, prescriptions, medical equipment, and long-term care.
Assisted living expenses may qualify as medical expenses if they are necessary to treat a medical condition. For example, if a senior requires assistance with ADLs due to a medical condition such as Alzheimer’s disease or Parkinson’s disease, the cost of that assistance may be tax deductible. However, if the senior does not require assistance due to a medical condition, the cost of assisted living would not be considered a medical expense for tax purposes.
In addition to medical expense deductions, there are several other tax benefits available for seniors. For example, seniors may be eligible for a higher standard deduction if they are over 65 years old or blind. Seniors may also be eligible for the earned income tax credit, which provides a refundable tax credit for low-income taxpayers.
Many seniors choose to work with a tax professional to prepare their tax returns. Tax professionals can help you identify all of the tax deductions that you are eligible for, which can help you save money on your taxes. You can find a tax professional in your area by searching online or asking for referrals from friends and family.
Planning for assisted living expenses can be challenging, but there are steps you can take to prepare. One option is to purchase long-term care insurance, which can help cover the cost of assisted living if you need it in the future. You can also save money in a dedicated retirement account, such as an IRA or 401(k), to help cover the cost of assisted living.
In addition to long-term care insurance and retirement accounts, there are several other financial options available for seniors. For example, seniors may be eligible for reverse have mortgages, which allow them to convert the equity in their homes into cash. Seniors may also be eligible for government programs such as Social Security or Medicare.
Choosing an assisted living community can be a daunting task, but there are several factors to consider. Some things to look for include the quality of care, the cost of the community, the location, and the amenities and services offered. It’s also important to tour several communities and talk to staff and residents to get a sense of the community’s culture and atmosphere.
Contact us today at 480-690-3078 and learn more about how we can support your needs and help you enjoy a vibrant and fulfilling lifestyle.
We look forward to hearing from you and showing you all our community offers.