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"That's a lot of money," my husband said, glancing at our budget sheet.I couldn't help but agree, both with the truth of the statement and the tone of annoyance in his voice. We were tallying up how much we spend on my dad each month. Some of it, like clothing and haircuts, was essential.
Other items — like pizza delivery when he didn't like the nursing home dinners — were a luxury. Most of it — a new comforter for his bed and cigarettes — fell in a gray area of emotional spending.At just 60, my dad is disabled and lives in a nursing home. That's devastating to think about, so when he asks for the comfort of a pizza, a new blanket, or even a cigarette (a habit I know he's not going to kick after a lifetime), I'm inclined to indulge him.
But when I saw the amount that we spend on my dad in black and white, I realized that caring for him was affecting my finances. And that made me wonder: Could I claim him on my taxes?Tax dependents are more than just childrenFirst, a little tax 101: A dependent is a qualified person whose living expenses you pay for. You can "claim" dependents on your taxes, which lower the amount of taxes you have to pay.
We most often think of dependents as children, but other relatives (and sometimes non-relatives who live with you) qualify too.Parents, step-parents, in-laws, siblings, and nieces and nephews can all be claimed as dependents in some cases. There are other qualifying factors: You must provide at least half of their living expenses, and they must make less than a certain amount ($4,400 in 2022 — one of several tax changes in 2022), says Elise Faucette, a CPA at CMP Certified Public Accountants. Importantly for my circumstances, a dependent doesn't necessarily have to live with you."The IRS allows for a broad definition of who can be claimed as a dependent on a tax return," Faucette says.
I wasn't able to claim my dad on my taxesAfter talking to Faucette, I was feeling good about my chances of claiming my dad and recouping some of the money that I spent on him during the year. But then I contacted Harry Gallagher, chief financial officer at Life Part 2, a retirement planning service."Generally, parents who live in a nursing home cannot be claimed as dependents," Gallagher told me.Ultimately, my own tax professional agreed with Gallagher, so I did not claim my dad on my taxes. For me, it came down to the support test.
To claim a dependent, you must provide more than half of their expenses, including lodging, food, transportation, and medical expenses. I reviewed the IRS worksheet for determining support. Although I paid lots of my dad's expenses, I didn't meet that 50% threshold because I wasn't handling lodging or medical costs.Every tax situation is uniqueAlthough I wasn't able to claim my dad, there are cases where a person can claim their parent, even if they live in a nursing home.
Gallagher gave sage advice: Talk to your tax professional about your specific situation. Consider whether your parent qualifies as a dependent, he said. Taking care of an aging loved one can take an emotional and financial toll, so if you're entitled to a deduction, you deserve to get it."It is important to be aware of the tax benefits that are available to those who take care of their parents, so that you can get the most out of the experience," Gallagher said.Faucette pointed out that you may be able to deduct some of the expenses of caring for a parent, including qualified medical expenses or the cost of adult daycare.
Again, this is an area where you'll have to talk with your own tax professional.Living in the sandwich generation — those caring for their kids and the parents — brings a lot of pressure. "Caring for an aging relative can be an exhausting and expensive endeavor," Faucette says. I won't be claiming my dad on my taxes, but I will be paying more attention to how much I spend on him.
And yet, now and then I'll still splurge for a pizza or cozy blanket. The comfort those purchases bring to both of us is worth the financial cost.