Page 4 - Senior Times South Central Michigan April 2021 - 28-04

Page 4 Senior Times - April 2021
TAX TIPS FOR CAREGIVERS TO MAXIMIZE DEDUCTIONS
By: Sherii Sherban, Publisher
New tax deadline: Monday, May 17, 2021.
The IRS issued Notice 2021-59 provid- ing extensions to May 17, 2021 for any individual with a return or payment due on April 15, 2021 without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. IRS Notice 2021-59 did not extend the first quarter estimated tax payment due on April 15, 2021.
1. Save all caregiving-related receipts
To conform to the automatic extensions granted through IRS Notice 2021-59, Michigan will also extend individual and composite State income tax returns and payments of 2020 taxes due on April 15, 2021 to May 17, 2021. First quarter esti- mates for tax year 2021 remain due on April 15, 2021. This notice does not apply to city income taxes. City income tax tax- payers should contact their respective tax administrators for information regarding that city's potential conformity with IRS Notice 2021-59.
2. Use health care spending accounts – Flexible spending and health care spending accounts may be used to pay for medical expenses that are not covered by insurance – but only if the taxpayer is responsible for at least 50% of that person’s care. This is an important distinction and part of what makes good recordkeeping a necessity.
Check the IRS list of eligible medical expenses so you don’t miss anything – you can deduct what you paid for dentures, hearing aids, and more.
This extension to May 17 could be good news for caregiver who may need some extra time collecting and preparing paper- work in order to maximize tax deductions. Some items are forward thinking and may not apply to the 2020 tax season but can be beneficial as we continue in 2021
For a non-family member, if a person lives in your home for the entire year, meets the low-income guidelines (excluding Social Security and disability payments), they may be considered a dependent for tax purposes.
7. Additional tax credits – If you hire someone to provide care for your older adult so you can work part- or full-time, you may be eligible for a tax credit to offset those care costs.
Caregiving-related tax deductions can lower your taxes and maximize your refund. If you’re caring for an older adult, tax-savvy family caregiver Shannon Listman teams up with Daily Caring to share several smart tax tips for caregivers to
In most cases, the sibling who contrib- utes 50% or more to the parent’s expenses is the eligible person.
One of the most important things to do is document all your expenses.
Publisher’s Note: You should always consult a tax professional about your spe- cific situation.
Got Medicaid and Medicare?
You could get more.
Additional benefits may include: Health Products Card
Personal Emergency Response System
help you find as many deductions as possi- ble.
Try to work this out early in the tax year so there is no question about who will be claiming the parent as a dependent or claiming the caregiving expenses.
– One of the most important things to do is document all your expenses. This includes medical bills that are not covered by insur- ance, transportation expenses for doctor’s appointments, and even home modifications that are medically necessary.
5. Deduct medical expenses you paid for – If you’re eligible to claim your older adult as a dependent under the IRS guide- lines, you can also deduct the medical expenses you paid for them.
3. Understand the IRS rules about dependents – To be claimed as a depen- dent, family members don’t need to live
in your home for the entire year as long as they meet other guidelines. That includes your supporting more than 50% of their liv- ing expenses, medical care, and other care.
6. Change your filing status – If you are unmarried at the end of the year and can claim your older adult as a dependent, you can file your taxes as the head of house- hold.
4. What to do when cost-sharing with siblings – When multiple siblings are responsible for caring for a family member, only one is allowed to claim the parent on their taxes.
Even if part of that cost is paid by your older adult, you may still be able to claim this credit if you pay 50% or more of their overall care and living expenses.
Call today to enroll or get answers to your questions.
(269) 501-5616
UHCCP.com/MIdual
Rhonda Stanton
Licensed Agent
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies, a Medicare Advantage organization with a Medicare contract and a contract with the State Medicaid Program. Enrollment in the plan depends on the plan’s contract renewal with Medicare.
Y0066_181101_111156_M_FINAL_MI CST27931
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If your parent is your dependent and they didn’t live with you, you can still file as head of household if you paid more than half the cost of keeping up their home.