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Tax help to take care of aging (and injury prone) parents

Mum and Willie 112515-cropped
My mother and my furry little brother Willie having a conversation. While walking Willie last October, my mom fell and broke her leg, a common occurrence among older dog owners. That accident has prompted ongoing discussions (OK, fights) on possible more hands-on care options for my octogenarian mother. (Photo by Kay Bell)

I'm a cat person. Fight me. Or don't. Like cats, I'm not really concerned about your pet opinion.

For almost a decade, though, I've been dealing with a dog. Not mine. My mom's.

She has a dog, Willie, and he's the most spoiled animal I have ever known. It's also why last fall she ended up in the hospital.

During one of his walks, Willie decided he wanted to chase something and the jerk of his leash ended with her on the sidewalk, unable to get up because of a broken greater trochanter bone.

Dangers for older dog walkers: My mother's injury situation is not novel. A study published today (Wednesday, March 6, 2019) in the journal JAMA Surgery, found that the estimated number of fractures associated with walking leashed dogs in recent years has grown by 163 percent — going from 1,671 in 2004 to 4,396 in 2017 — among patients 65 and older.

My mom was lucky, relatively speaking. Although she broke a major leg bone, it wasn't her hip and she didn't need surgery. After a brief hospital stay, then a rehab facility for several weeks, she returned to her home — and dog — sooner than I and even her doctors had expected.

I'm convinced that a major reason she recovered so quickly was Willie. She was convinced I wasn't taking proper care of him, that is, not giving in to his every whim. She was right. I'm a bad dog mom, having "raised" only cats, who aren't as needy or as needy in the same ways as dogs.

Plus, I was a bit ticked at Willie for his role in her injury. Still, my mother refuses to put any blame for her fall on her beloved pooch.

I'm still working on convincing her that saying "no" to Willie won't kill him and that he'll still love her if she shortens his walks or goes a bit more slowly. The dog walking injury analysis is on my side.

"Clinicians may play a role in identifying at-risk patients and minimizing fracture risk by advocating for preventative actions, such as obedience training to ensure dogs do not lunge while leashed, or suggesting smaller dog breeds for individuals contemplating ownership," according to the University of Pennsylvania study authors.

They found, as was my mother's case, that most of the dog-walking related fractures occurred among women and more than a quarter (28.7 percent) required hospital admission.

When it's time to parent your parents: All things considered, my 84-year-old mother (and her dog) came through their fall in pretty good shape. I still worry, but it's just something I'm going to have to learn to live with since she's not giving up Willie.

If my mom actually lived with the hubby and me or accepted more financial support from us, I might be able to exert more control. Or not. She's always been stubborn, something the hubby says is genetic. But I digress.

My mom remains fiercely independent and I'm glad that for the most part she is still able to take care of herself, both physically and financially.

However, many adult children eventually find their parent/child roles reverse and they must enter into a more formalized care taking situation.

In these cases, the Internal Revenue Code might be able to provide you some help.

New credit replaces exemption: First, let's look at a major tax law change.

Persons who've been taking care of mom and/or dad for a while have learned this filing season that there have been some changes.

Under prior law, when you could claim your older parent as a dependent, you were allowed an exemption for that parent. This was several thousand dollars that helped reduce your adjusted gross income to a lower taxable income amount.

However, under the Tax Cuts and Jobs Act (TCJA), exemptions are eliminated.

In many situations, the loss of this income reduction tool should be offset by the new tax law's larger standard deduction amounts and wider income brackets to which new lower tax rates apply.

Also, your dependent parent could mean you qualify for the TCJA's new $500 tax credit for any non-child dependent. The amount might seem small, but note that it's a tax credit, which means it provides a dollar-for-dollar reduction of any tax you owe.

Again, every individual tax situation is unique, so the TCJA changes might help or not in parental dependent cases. You'll need to run the numbers to see where you stand.

Parents as dependents: The key to claiming the new family tax credit is making sure your parents qualify as your tax dependent. The requirements are slightly different from what's necessary when claiming a minor child as your dependent.

You and your folks must pass five tests in order for Mom and/or Dad to be claimed as your tax dependent. They are:

  1. The person you are claiming as a dependent must be related to you. This obviously isn't a problem when you claim a parent. In-laws and stepparents are also allowed here. However, foster parents do not count as a relative for tax dependent purposes. To claim a foster parent, he or she must live with you for a year as a member of your household.
  2. Your parent must be a citizen or resident of the United States or a resident of Canada or Mexico.
  3. Your parent must not file a joint return. If your parent is married, he or she must file separately. There is an exception if your parent is filing jointly, but has no tax liability. If your parent files a joint tax return solely to get a refund, you can claim him or her as a dependent.
  4. Your parent must not have a gross income of $4,150 or more for the 2018 tax year. This amount will be adjusted for inflation as necessary for tax years 2019 through 2025, the last tax year for which TCJA provisions are in effect unless they are extended. Non-taxable income, such as Social Security when the benefits are the person's only source of funds, does not count toward this amount.
  5. You must provide more than half of the support for your parent during the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation and similar necessities.

Special parental support considerations: Note in determining parental support, the half amount can be achieved when you and others, for example your siblings, all contribute to an aging parent's support.

To receive the exemption, all those supporting your parent must agree on and sign IRS Form 2120, Multiple Support Declaration.

Even if you cannot claim your parent as a dependent because he or she filed a joint tax return or has too much income, you still may be able to get a tax break for a parent's medical expenses. You can deduct your parent's medical expenses on your Schedule A as long as you provide more than half of Mom's or Dad's support.

Since your medical costs must exceed a certain percentage of your AGI (7.5 percent for 2018 returns, 10 percent for the 2019 tax year) before you can claim them, a parent’s added expenses could help you meet this itemized deduction requirement.

You may also be able to claim the Dependent Care Credit if you must pay for someone to provide necessary assistance to your live-in parent so that you can go to work.

Aging, as my dearly departed father-in-law always reminded us, is not for sissies. This applies to both adult children and their parents, especially when the time arrives to discuss lifestyle changes for the entire family.

Here's hoping that these shifts aren't necessary for a long time and when they do occur, they go smoothly and that Uncle Sam and the tax code can help with the transition.

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