Top Three Tax Prep Tips for Caregivers

“Tax Day” is nearly here. Are you a caregiver looking for some last-minute tax tips? AARP, which offers help through the AARP Foundation Tax-Aide program in conjunction with the IRS, explains the many ways of how caregivers can save on their taxes.

We at Premier Home Health Care Services, Inc. recommend the following three tips:

1. Work with the Tax Counseling for the Elderly (TCE) program: As the IRS explains, this program offers FREE tax help to taxpayers, particularly those who are age 60 and older. Specializing in information about pensions, retirement, and other issues of concern to seniors, these experts are volunteers who are IRS-certified. Most TCE sites are operated through the AARP Foundation Tax-Aide program. To find the site nearest you, the AARP has a Tax-Aide Site Locator or you can call 1-888-227-7669.
2. Be prepared with the right documentation: Whether you choose to use TCE or to work with your family accountant, it’s important to have all of the documentation you need to establish your income, your expenses, and deductibles. If you’re filing jointly with your spouse, you will need documentation for the both of you. And when claiming dependents, you will need to provide documentation of their information as well.
   • Photo ID
   • Social Security cards for you, your spouse and all of your dependents.
   • Birth dates for you, your spouse and all of your dependents.
   • Income statements (W-2, W2-G, 1099-R, and/or 1099-Misc from all employers; 1099 Interest, and dividend statements from banks).
     • Proof of bank account routing and account numbers for direct deposit, such as a blank check or copies of income transcripts from IRS and state, if applicable.
   • Health insurance documentation (all 1095 Tax Forms: Forms 1095-A, B or C; Affordable Care Statements).
   • A copy of last year’s federal and state returns (if available).
3. Consider claiming the person for whom you provide care as a dependent: Not only are your children your dependents, but if you’re financially responsible for the care of someone with a chronic illness and/or disability – be prepared to discuss this with your tax prep expert. Keep in mind the following IRS guidelines as you approach this conversation with your tax prep expert:
   • A spouse who is incapable of self-care and has lived with you for more than half of the year can qualify as a dependent.
   • An individual (relative or non-relative) who is incapable of self-care and has lived with you for more than half of the year can qualify as a dependent.
   • If the person you care for is a “qualifying individual” for only part of the tax year (e.g., you share care of a parent with a sibling during the year), only the expenses incurred during that time of the year in which they qualify as a dependent can be claimed.
   • Care can be provided inside or outside the household, but must be primarily for the well-being of the individual to be included.
   • All care providers must be identified with their taxpayer identification number, name and address.

The tax preparation process can seem overwhelming. For those who work with gray-market services, this tax preparation process can be even more complicated. While working with gray-market services, the client is responsible for: payroll taxes, all deductions and withholdings of the care staff – as the employer. A licensed agency like Premier Home Health Care, however, manages these tax processes for its staff.

Do you have questions about Premier’s taxpayer identification number? Or do you want to learn more about discussing financial management of your home health care with your tax expert? To learn more about Premier, please call us at 1-866-648-5119.