If you're helping out a financially stressed relative in this still-lousy economy, you may be entitled to some tax breaks.
Taking care of your elderly loved ones is a difficult task. It can be emotionally difficult, as well as financially crippling.
In honor of tax season, SmartMoney offers some related articles about often-overlooked deductions that might help relieve some of your financial stress if you are providing such care. The first article is titled Tax Breaks for Helping Relatives and the sequel article is More Tax Breaks for Supporting Relatives.
For example, the most obvious way to realize some tax relief is to claim your elderly loved one as a “dependent.” In addition, do you pay for medical expenses? If yes, then there is a deduction for that.
As you might expect, the level of support available under the tax code depends on multiple factors, to include the level of support you provide, the support your elderly loved one needs, and even various programs available in your area.
It may be too late for you to pursue tax relief for tax year 2011. However, now is the perfect time to explore your options for tax year 2012 and plan accordingly.
Regardless, I recommend taking time to read both articles. If this issue does not directly affect you now, it may in the future.
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Reference: SmartMoney (March 7, 2012) “Tax Breaks for Helping Relatives”