Home Health Care Tax Information
Taxes can be overwhelming, as the information often changes. Home health care can be expensive, with many expenses not covered by private insurance. Understanding the basic principles pertaining to taxes and health care and knowing where to look for additional help can get you headed in the right direction.
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You can deduct approved medical expenses on Schedule A (Form 1040), which is filed with your annual tax return. You can only deduct medical and dental expenses that are greater than 7.5 percent of your adjusted gross income (AGI). The IRS defines medical expenses as the costs of diagnosis, cure, mitigation, treatment or prevention of disease, as well as the costs for treatments affecting any part or function of the body.
What's Included
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You are allowed to include the medical and dental expenses you paid during the tax year, regardless of when the services were provided. The date showing on statements for phone and online payments is considered proof of payment. The day you mail or deliver a check is also considered proof of payment. You can also include your spouse or dependent's medical expenses. See Publication 502 for a detailed listing.
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What's Excluded
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Some health care expenses are not deductible. Examples include cosmetic surgery, future medical care, nursing care for a healthy baby and medications from other countries. See Publication 502 for a detailed listing.
Health Coverage Tax Credit
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You may be eligible for Health Coverage Tax Credit (HCTC) advance payments if you paid the premiums for qualified health insurance coverage, such as COBRA continuation coverage. Those who qualify receive payments representing a percentage of the premiums they paid throughout the year. In 2010, the HCTC is 80 percent of the premiums paid for coverage each month you meet the eligibility requirements, according to the IRS.
Additional Help
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If you get confused trying to figure out your taxes, you can contact the IRS, a taxpayer advocate or a low income taxpayer clinic (LITC). The IRS trains volunteers via the Volunteer Income Tax Assistance (VITA) program to help elderly and low income taxpayers with their returns.
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- Photo Credit Image by Flickr.com, courtesy of Rick Audet
