Assisted Living Services May Be Tax-Deductible

As we all know too well it is tax season.  With the April 15 deadline coming up quickly, this is a good time to remind your residents and their families that assisted living services can, in many cases, be filed as a tax-deductible medical expense.  Keep in mind however, that providers cannot provide tax advice, so advise your residents and their responsible parties to consult with their personal tax advisor, accountant, or the IRS regarding all tax decisions.  As the Assisted Living Federation of America (ALFA, http://www.alfa.org/) reminded us in a recent update, HIPAA (Health Insurance Portability and Accountability Act of 1996) guidelines spell out that “expenses can be tax-deductible if such services are provided pursuant to a plan of care prescribed by a licensed health-care practitioner, and the personal care services are required by a person who is unable to perform at least two activities of daily living, or has severe cognitive impairment and requires supervision to protect self and others from health and safety threats.”

Again, always confirm with your accountant and/or the IRS before making any tax decisions.  The IRS provides more information on this topic in Tax Topic 502 (Medical and Dental Expenses) and Publication 502 (Medical and Dental Expenses PDF).  Both can be obtained at http://www.irs.gov/.

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