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 With the
cost of a year's stay in a nursing home averaging $74,095 for a private room and
$64,240 for a semi-private room, claiming a deduction for the expense can result
in substantial tax savings.* Here's a summary of what taxpayers need to know.
Basic rule: The tax law allows a medical expense deduction for nursing home expenses if the primary reason for being in the home is for medical care rather than for personal reasons. If a deduction is allowed, the entire cost, including meals and lodging, is considered a medical expense. Who qualifies: The deduction is available to taxpayers paying their own nursing home costs and to those paying for the care of a spouse or dependent. If you are contributing to the cost of your parent's care, you'll want to find out whether your parent can qualify as your dependent for purposes of the medical expense deduction. Limitations: Note that you must itemize deductions on your tax return to claim medical expenses. The deduction is limited to the amount that, in the aggregate, exceeds 7.5% of your adjusted gross income for the year. *Average cost figures are from The MetLife Market Survey of Nursing Home & Home Care Costs, September 2005. |
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