Are you among the millions of adults who care for a parent or other older family member? If so, the following tips can help you ease the financial burden of having a parent or other loved one move into your home.
By Times Staff Writer
Published May 25, 2003
1. Brace yourself for increased expenses. When a parent moves in, it can cost an extra $7,000 a year to cover higher utility, food and transportation costs and home remodeling expenses. That does not include health care costs. Your income also could be lowered if you must reduce your work hours.
2. Schedule a family meeting. It's important to meet with your parent and siblings and have an honest discussion about money and caregiving issues, including how expenses and responsibilities could be divided up. This could prevent serious misunderstandings and resentments later.
3. If your parent is able to pay and he or she will make up one-third of your household, it's reasonable to expect a contribution of one-third of the household expenses. Recognize that it likely won't be possible for your parent to contribute that much if he or she receives Medicaid benefits.
4. Know how to handle your parent's contribution. It must be declared as "other income" on your tax return. Your parent still can claim his or her own standard deduction, or can itemize if that saves more money.
5. If your parent can't afford to pay, you could keep track of your expenses and later deduct that amount from your parent's estate before the rest is divided between you and your siblings. Such reimbursement arrangements should be outlined in your parent's will. This approach provides tax breaks, but it doesn't allow you to claim your parent as a dependent.
6. Consider the dependent status tax deduction. You can claim your parent as a dependent if you provide more than 50 percent of his or her support for the entire year and your parent has a very low gross annual income.
7. Remember the medical expense deduction. You also can take a tax deduction for home improvements that provide a medical benefit.
8. Look into flexible spending accounts. If your employer offers a dependent-care flexible spending account, you can stash pretax dollars there and use that money to pay a caregiver to stay with your parent while you work.
9. Investigate long-term care insurance. If your parent has long-term care insurance coverage that pays in-home caregivers, you could receive additional financial help. Bear in mind that such coverage can be costly.
10. Pursue free or low-cost programs that help with nursing care, respite care, transportation and other services. Visit the Web sites of the U.S. Administration on Aging (www.aoa.gov) Eldercare Locator (www.aoa.gov/elderpage/locator.html) the National Council on Aging BenefitsCheckUp (www.benefitscheckup.org) and the Alzheimer's Association (www.alz.org)
