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Tax help in caring for an aging parent

A parent may not meet the tax exemption level as far as taxable income, but gets $15,000 in Social Security and uses it to pay for some medicine and buy clothes. In that case, the adult child's contribution may not meet the support threshold.

The one bit of wiggle room here is that your parent doesn't have to live with you. When a parent is able to remain in his or her own house, in an assisted living facility or a nursing home, costs you pay for parental support at those locations count toward meeting the IRS requirement.

Be careful, though, in determining what is support. Uncle Sam may not agree with what you and your parent consider vital. For example, items such as furniture, appliances or even cars can in some instances, be counted as support; other times the IRS says "no." For details and examples, check IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. The booklet also contains a work sheet to help you figure your support contributions.

Counting medical and other costs

Once your parent does meet the IRS dependency tests, you can use any medical expenses you pay for Mom or Dad toward this itemized deduction. Since medical costs must exceed 7.5 percent of your adjusted gross income before you can claim them, a parent's added expenses could help you meet the requirements.

And the IRS offers a little leeway here. If your parent isn't considered a dependent for exemption purposes simply because he or she earned too much but met the other tests, the IRS says Mom or Dad still could be counted as a dependent for medical deduction purposes.

When adding up those parental medical costs, don't forget premiums for supplementary Medicare coverage or long-term care insurance. Once your parent is your dependent, some of these payments that you make can be counted toward your deductible medical expenses.

And if your dependent parent lives with you and requires continual care, Roth says, you may be eligible for another tax break. What you spend for this attention generally won't count toward the medical deduction. But if it's necessary so that you can go to work, you can claim the dependent care credit.

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