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Tax Form 1040 For Assisted Living DeductionThe costs of placing an elderly loved one in assisted living can be very expensive. Typically, Assisted Living facilities and communities are private pay. If you have been paying for assisted living for quite sometime now, or have recently helped an aging loved one move to an assisted living facility, you probably are aware that assisted living costs can increase each year.

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In This Tax Deduction for Assisted Living Article:

Is  Assisted Living Tax Deductible?
Determining Tax Deduction Eligibility For Assisted Living
Medical Expenses Related To Assisted Living


Is Assisted Living Tax Deductible?

According to the Internal Revenue Service (IRS), taxpayers are allowed to deduct the cost of assisted living partially or in full if you qualify. Unfortunately, many people do not realize that assisted living expenses may be tax deductible, which results to missing out on money that is rightfully theirs – money which could be used to support their family or their elderly loved ones.


Determining Tax Deduction Eligibility for Assisted Living Costs

Like most topics that have to do with taxes, tax deductions for costs associated with assisted living can be a bit confusing. The information in this article is a good starting point, but keep in mind that the assistance of a tax professional is the best way to determine whether or not you or your loved one are eligible to take assisted living costs as a tax deduction.

According to the IRS, medical expenses related to long-term care including diagnostic preventive, therapeutic, mitigating, rehabilitative services, and maintenance and personal care services that are required by a chronically ill individual and prescribed by a licensed health care practictioner are deductible.

In order to be eligible for this assisted living deduction, a licensed health care practitioner should have certified that your loved one is chronically ill for one of two reasons:

  1. Your loved one must require supervision because of cognitive impairment such as Alzheimer’s disease or related dementias.
  2. Your loved one must not be able to perform at least two daily living tasks, such as feeding themselves, bathing themselves, getting dressed or using the bathroom alone.


Along with this requirement, your loved one must also be receiving care in accordance to a prescribed care plan that was drawn up by a licensed health care professional and spells out the specific care the assisted living resident or patient requires throughout the day.

If your elderly loved one is not residing in an assisted living facility for medical care reasons, it is possible that medical care costs may still be deductible but room and board costs will not. However, if the senior is living in an assisted living facility or senior care home due to their health care requirements and they are being cared for in accordance to a care plan prescribed by their doctor, you may be able to deduct a higher percentage of the costs of care.

Please note that in order to take advantage of this deduction, you must be entitled to itemize your deductions when filing your taxes by using Schedule A (Form 1040). If your medical expenses and other costs related to long-term care services exceed more than 7.5 percent of your adjusted gross income then they are tax deductible. Remember, you can only deduct the amount that is more than 7.5% of your Adjusted Gross Income (the amount on line 38 of your 1040 form).


Medical Expenses You Can Deduct on Your Tax Return

Medical expenses you can deduct on your tax return can include much more than doctor’s appointments and prescription medications. You are allowed to deduct other medical necessities such as:

  • Wheelchairs
  • Dentures
  • Eye Exam and Prescription eyeglasses
  • Cost of travel to medical appointments
  • Meals and lodging at a hospital or medical facility (cannot be more than $50/night per person)
  • Cost for medical equipment
  • Home Improvement for medical care
  • Life Care Fee or “Founders Fee” as a payment to a retirement home for medical care
  • Medical expenses for immediate family member who has lived with you for a year for whom you provided over half of the support.
  • Insurance policy premiums that cover medical care


It is important to note that expenses that are reimbursed through insurance or other programs are not deductible. In order to accurately determine which ones and how much you might be able to deduct this year, contact your tax professional, and be sure to save receipts for items that might be deductible!

To learn more about Medical and Dental Expenses you can deduct, Read IRS Publication 502.


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Kate Allado, Senior Care ExpertAbout the Author: Catharine D. Allado is a Senior Care Expert and the COO of – A trusted and comprehensive online directory of Senior Care Homes such as Assisted Living, Nursing Homes and other types of Senior Housing in California, Florida, New York, Arizona and the rest of the United States. also provides FREE Assisted Living options to help seniors and families find the best Senior Housing on the planet!



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