Rosanne Rogé
Certified financial planner, geriatrics
Rosanne Rogé joined R.W. Rogé & Company, Inc. in January 1995. She is a graduate of C.W. Post - Long Island University. Ms. Rogé is certified by The Certified Financial Planners Board of Standards to use the professional certifications CFP and Certified Financial Planner. She is also a Certified Senior Advisor (CSA).
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Question
If a family member is paid to care for a parent from the parent's fund does the person paid have to claim the...
I would check with the IRS or an accountant regarding the taxation of the income. I'm sure there is some type of tax that is due,... I would check with the IRS or an accountant regarding the taxation of the income. I'm sure there is some type of tax that is due, unless the funds are gifted (use the annual exclusion of $13,000 per year) by the parent. If there is some type of payment coming from the parent and at some point in the future they may be applying for Medicaid, I would recommend documenting every check that was written so it does not interfere with the "lookback" period. see more
Question
Can my father claim what he pays his live-in caregiver as a deduction on his taxes?
I would recommend that you check IRS Pub 554, Itemized Deductions for Medical and Dental Expenses; in partcular Nursing Services and... I would recommend that you check IRS Pub 554, Itemized Deductions for Medical and Dental Expenses; in partcular Nursing Services and Household Help. These two areas define the specifics that must be met for the deduction. Also, if the individual's services are retained through an agency, I would check with them as well. see more
Question
Is mileage driven to care for elderly parent tax deductible?
If you have covered more than half of your elderly parents living expenses (IRS definition of support which includes food, medical care,... If you have covered more than half of your elderly parents living expenses (IRS definition of support which includes food, medical care, housing insurance and transportation) you may be able to take this deduction. For more specific detailed information on the deduction, I would recommend you review the IRA Publications 501 and 502 or check the IRS website at www.irs.gov. see more
Question
Are incontinence products a tax write-off?
According to the IRS guidelines, expenses for incontinence supplies may be tax-deducitbl ifyou can show they are needed to relieve the... According to the IRS guidelines, expenses for incontinence supplies may be tax-deducitbl ifyou can show they are needed to relieve the effects of a specific disease. You may also seek reimbursement through your health savings account or FSA providing you have a letter from the physician that explains the reason for the use of the products. You may also be able to find out about reimbursement, rather than deductions, for these products throught your local county office for the aging. see more
Question
As Mom's POA I set up funeral trust to apply for Medicaid and it is gaining interest. Is this tax deductible i...
Funeral trust accounts are established as a revocable, grantor trust. The IRS has ruled that any earnings are income to the owners of the... Funeral trust accounts are established as a revocable, grantor trust. The IRS has ruled that any earnings are income to the owners of the account and must be declared as such. see more
Question
If your elderly parent is disabled do they receive a tax deduction every year?
The IRS Code provides numerous benefits for persons with handicaps or disabilities. Since I would need to know more specific details, I... The IRS Code provides numerous benefits for persons with handicaps or disabilities. Since I would need to know more specific details, I would recommend checking with your tax preparer. If the situation remains the same as the previous tax filing year, I think it would be safe to assume the deduction for this year would still be available. see more
Question
My father is 91, lives alone but I do all shopping, provide all meals, take him to his doctors. Can I claim an...
Your Dad would need to pass the IRS Dependency Requirements for you to be able to claim any of his expenses on your tax return. Below is a... Your Dad would need to pass the IRS Dependency Requirements for you to be able to claim any of his expenses on your tax return. Below is a very detailed description of the IRS Dependency Requirements, but it may provide some guidance for your situation.
IRS Dependency Test
1. Income Test
The hardest dependency hurdle is the amount of income your parent earns. Their gross income (e.g., capital gains, self-employment income and other taxable income) cannot be more than the exemption amount (unless they are disabled); in 2009 this was $3,650. (Here’s where kids get a break. This threshold is waived for a child younger than 19 or one who is 24 or younger and still in school.)
The income barrier represents TAXABLE income; gross income does not apply to NON-taxable income like social security benefits or retirement distributions (see your tax preparer to determine what portion is taxable). But if your parents had disciplined saving habits and invested in stocks, bonds, and saving accounts, income from dividends, interests, and capital gains can quickly add. In many cases these sources are considered taxable income, which means that many adult children cannot claim mom or dad as a dependent if they add up above the $3,650 threshold.
2. Support Test
The second big hurdle is the support test. To be deemed a dependent for tax purposes, you must prove you are responsible for at least half of a your parent’s expenses for housing, utilities, food, clothing, medical costs over and above what Medicare and supplemental insurance provides.. If you share that responsibility with others (i.e., you and your two brothers), you must provide more than 10% of your parent’s total financial support to claim an exemption for your parents (in addition to meeting the other tests). To do so, you must also obtain IRS form 2120 from each sibling/supporter who provided more than 10% of the support and who has agreed not to take the dependency exemption on their own return.
When your parent lives in your home, to reach the 50%-plus threshold you should take into account the fair-market room rental, food, medicine and other support items. But be careful in determining what constitutes 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.”
When determining if you provide more than half of your parent’s support costs, remember to factor in their Social Security Benefits if they are using it to cover some of their support items. This is were Social Security may not disqualify them from the Income Test, but does disqualify them from the Support Test. So say mom doesn’t have $3,650 in taxable income, but gets $15,000 in Social Security and uses it to pay for some medicine and buy clothes. In that case, your contribution to her support may not come up to half.
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 in a nursing home, costs you pay for parental support at those locations count toward meeting the IRS requirement.
2b. Multiple Sibling Support Test
Sometimes you don’t have to shoulder the load alone. Many adult children get help from siblings in caring for mom and dad.
Not only does this help maintain your day-to-day bank balance, it also spreads out any tax breaks. When none of you solely pays for half of a parent’s support, but each contributes at least 10% toward parental care, take a look at the IRS’s multiple-support declaration. This form helps you account for the tax implications of a shared-care arrangement.
So say Mom is in a nursing home. Her Social Security covers 40% of the facility’s costs, and you and your two brothers split the remainder, each paying 20%. Since more than half of her support comes from her three kids, she can be claimed as a dependent — but by only one of you. That choice is left to you and your two brothers.
After you and your brothers agree that you can claim mom as a dependent this tax year, file Form 2120, Multiple Support Declaration with your tax return. This form indicates that while several siblings contributed to mom’s support, the others waive any tax-exemption claim.
You also need to get signed statements from your brothers acknowledging that they waived their tax claims. You don’t have to send these documents with your 1040, but keep them in your records in case the IRS ever questions your exemption or medical-deduction claims.
And the best news about a multiple support agreement is that it’s not permanent. Meaning you can rotate it around from tax year to tax year. The next year, another sibling takes the tax exemption and the third brother the next year. Also make sure that the year you claim Mom as a dependent, you, not your siblings, pay her medical costs so that you get the full tax-deduction benefit. Any medical payments a sibling makes, while helpful, will do neither of you any tax good.
Misc Test
3. They are your parent, grandparent, aunt, uncle, or other elderly relative by blood or legal adaption.
4. They must be a citizen or legal resident of the U. S., Canada, or Mexico (certain restrictions apply).
5. A married parent cannot file jointly unless the husband and wife have no tax liability when filing separately.
Next Steps:
While these tax breaks softens the financial blow, it’s not going to cover everything that it’s going to cost you to support your aging parents. Tax breaks won’t substitute for good financial planning. It’s one of the hardest things that children have to do because it deals with finances, but you need to sit down with your parents and siblings and make a plan. For years and years these people have taken care of you. Now that is shifting.
Additional aging parent resources: These online resources offer tips and advice for adult children caring for aging parents:
www.nlm.nih.gov/medlineplus/caregivers.html — The federal government’s compilation of links to services for older individuals and their caregivers.
http://www.eldercare.gov/ — The federal Eldercare Locator can put caregivers in touch with local senior services.
www.familycaregiving101.org — Two associations teamed up to help new caregivers learn the ins and outs of their roles.
www.medicare.gov/nhcompare — Compare nursing home quality data and find state inspection agencies at this federal site.
www.strengthforcaring.com — Connect and chat with other caregivers at this site, sponsored by Johnson & Johnson.
Tax Resources:
IRS Publication 501: Exemption Filing
IRS Publication 503: Dependent Care see more
IRS Dependency Test
1. Income Test
The hardest dependency hurdle is the amount of income your parent earns. Their gross income (e.g., capital gains, self-employment income and other taxable income) cannot be more than the exemption amount (unless they are disabled); in 2009 this was $3,650. (Here’s where kids get a break. This threshold is waived for a child younger than 19 or one who is 24 or younger and still in school.)
The income barrier represents TAXABLE income; gross income does not apply to NON-taxable income like social security benefits or retirement distributions (see your tax preparer to determine what portion is taxable). But if your parents had disciplined saving habits and invested in stocks, bonds, and saving accounts, income from dividends, interests, and capital gains can quickly add. In many cases these sources are considered taxable income, which means that many adult children cannot claim mom or dad as a dependent if they add up above the $3,650 threshold.
2. Support Test
The second big hurdle is the support test. To be deemed a dependent for tax purposes, you must prove you are responsible for at least half of a your parent’s expenses for housing, utilities, food, clothing, medical costs over and above what Medicare and supplemental insurance provides.. If you share that responsibility with others (i.e., you and your two brothers), you must provide more than 10% of your parent’s total financial support to claim an exemption for your parents (in addition to meeting the other tests). To do so, you must also obtain IRS form 2120 from each sibling/supporter who provided more than 10% of the support and who has agreed not to take the dependency exemption on their own return.
When your parent lives in your home, to reach the 50%-plus threshold you should take into account the fair-market room rental, food, medicine and other support items. But be careful in determining what constitutes 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.”
When determining if you provide more than half of your parent’s support costs, remember to factor in their Social Security Benefits if they are using it to cover some of their support items. This is were Social Security may not disqualify them from the Income Test, but does disqualify them from the Support Test. So say mom doesn’t have $3,650 in taxable income, but gets $15,000 in Social Security and uses it to pay for some medicine and buy clothes. In that case, your contribution to her support may not come up to half.
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 in a nursing home, costs you pay for parental support at those locations count toward meeting the IRS requirement.
2b. Multiple Sibling Support Test
Sometimes you don’t have to shoulder the load alone. Many adult children get help from siblings in caring for mom and dad.
Not only does this help maintain your day-to-day bank balance, it also spreads out any tax breaks. When none of you solely pays for half of a parent’s support, but each contributes at least 10% toward parental care, take a look at the IRS’s multiple-support declaration. This form helps you account for the tax implications of a shared-care arrangement.
So say Mom is in a nursing home. Her Social Security covers 40% of the facility’s costs, and you and your two brothers split the remainder, each paying 20%. Since more than half of her support comes from her three kids, she can be claimed as a dependent — but by only one of you. That choice is left to you and your two brothers.
After you and your brothers agree that you can claim mom as a dependent this tax year, file Form 2120, Multiple Support Declaration with your tax return. This form indicates that while several siblings contributed to mom’s support, the others waive any tax-exemption claim.
You also need to get signed statements from your brothers acknowledging that they waived their tax claims. You don’t have to send these documents with your 1040, but keep them in your records in case the IRS ever questions your exemption or medical-deduction claims.
And the best news about a multiple support agreement is that it’s not permanent. Meaning you can rotate it around from tax year to tax year. The next year, another sibling takes the tax exemption and the third brother the next year. Also make sure that the year you claim Mom as a dependent, you, not your siblings, pay her medical costs so that you get the full tax-deduction benefit. Any medical payments a sibling makes, while helpful, will do neither of you any tax good.
Misc Test
3. They are your parent, grandparent, aunt, uncle, or other elderly relative by blood or legal adaption.
4. They must be a citizen or legal resident of the U. S., Canada, or Mexico (certain restrictions apply).
5. A married parent cannot file jointly unless the husband and wife have no tax liability when filing separately.
Next Steps:
While these tax breaks softens the financial blow, it’s not going to cover everything that it’s going to cost you to support your aging parents. Tax breaks won’t substitute for good financial planning. It’s one of the hardest things that children have to do because it deals with finances, but you need to sit down with your parents and siblings and make a plan. For years and years these people have taken care of you. Now that is shifting.
Additional aging parent resources: These online resources offer tips and advice for adult children caring for aging parents:
www.nlm.nih.gov/medlineplus/caregivers.html — The federal government’s compilation of links to services for older individuals and their caregivers.
http://www.eldercare.gov/ — The federal Eldercare Locator can put caregivers in touch with local senior services.
www.familycaregiving101.org — Two associations teamed up to help new caregivers learn the ins and outs of their roles.
www.medicare.gov/nhcompare — Compare nursing home quality data and find state inspection agencies at this federal site.
www.strengthforcaring.com — Connect and chat with other caregivers at this site, sponsored by Johnson & Johnson.
Tax Resources:
IRS Publication 501: Exemption Filing
IRS Publication 503: Dependent Care see more
Question
How do I prove on my taxes that I provided care for my mother, so that I can claim her as a dependent?
You may be able to claim your Mom as a dependent on your tax returns if you pass the IRS’s Dependency Test. If your Mom meets the IRS’s... You may be able to claim your Mom as a dependent on your tax returns if you pass the IRS’s Dependency Test. If your Mom meets the IRS’s Dependency Requirements, you’ll be able to claim an added personal exemption on your income tax return. The exemption amount is adjusted annually for inflation and can be found on your tax return form. Second, you can count any medical expenses you pay for mom towards another itemized deduction. Since medical costs must exceed 7.5% of your adjusted gross income before you can claim them, your Mom’s added expenses could help you meet the requirement. When adding up those parental medical costs, don’t forget premiums for supplementary Medicare coverage or long-term care insurance.
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 income (see dependency test #1) but met the other tests, the IRS says mom still could be counted as a dependent for medical-deduction purposes.
Another additional tax benefit is available for people whose dependent adult parents live in their home. If the adult child works (or is looking for work) and has to pay for care of the parent to make their own employment possible, the expenses can qualify for the dependent care credit or for pre-tax payment through an employer-sponsored flexible spending arrangement (FSA). This tax break phases out with your income, so check with your tax adviser.
Last, if you are working at a company that offers a plan that allows for pre-tax deduction of dependent care and/or health care expenses, you can use those dollars for items not eligible for the Medical Expense Deduction or for relief if you will not be able to itemize. This is a great way to get your tax break now instead of later, so be sure to take advantage of it.
The IRS website, www.irs.gov or IRS Publications 501 and 503 provide information on the Dependency Requirements as well as any Exemptions you may claim. see more
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 income (see dependency test #1) but met the other tests, the IRS says mom still could be counted as a dependent for medical-deduction purposes.
Another additional tax benefit is available for people whose dependent adult parents live in their home. If the adult child works (or is looking for work) and has to pay for care of the parent to make their own employment possible, the expenses can qualify for the dependent care credit or for pre-tax payment through an employer-sponsored flexible spending arrangement (FSA). This tax break phases out with your income, so check with your tax adviser.
Last, if you are working at a company that offers a plan that allows for pre-tax deduction of dependent care and/or health care expenses, you can use those dollars for items not eligible for the Medical Expense Deduction or for relief if you will not be able to itemize. This is a great way to get your tax break now instead of later, so be sure to take advantage of it.
The IRS website, www.irs.gov or IRS Publications 501 and 503 provide information on the Dependency Requirements as well as any Exemptions you may claim. see more
Question
Is assisted living considered a medical tax deduction?
In the case of assisted living, you are paying for care, but remember you are also paying for room and board. The room and board portion... In the case of assisted living, you are paying for care, but remember you are also paying for room and board. The room and board portion of the care do not count towards the medical expenses. However, the entire amount would be if the individual is classified as "chronically ill". This means that a licensed healthcare professional has certified that the individual is unable to perform at least two of the activities of daily living ( eating, toileting, transferrring, bathing, dressing and continence) without substantial assistance for at least 90 days.
If you are paying for the individual to be in an assisted living facility for the above reasons (inability to perform two of the ADLs), and are related to the patient, you may take the deduction from your return. see more
If you are paying for the individual to be in an assisted living facility for the above reasons (inability to perform two of the ADLs), and are related to the patient, you may take the deduction from your return. see more
Question
How should my mother's assets (savings, deed to house, etc) be set for minimum death taxes?
This is really more of a legal than tax question and the situations are different for every individual. I would recommend that you and your... This is really more of a legal than tax question and the situations are different for every individual.
I would recommend that you and your Mom make an appointment with an reputable Estate Planning Attorney in your area. He/she will provide you with the proper guidance for your particular situation. see more
I would recommend that you and your Mom make an appointment with an reputable Estate Planning Attorney in your area. He/she will provide you with the proper guidance for your particular situation. see more
Question
Are aid and attendance benefits exempt from income tax?
The Aid and Attendance Benefit for our Veterans are received tax-free to the recipient. Veterans are elgibile if they served in WWI, WWII,... The Aid and Attendance Benefit for our Veterans are received tax-free to the recipient. Veterans are elgibile if they served in WWI, WWII, Korea and Vietnam. For those wartime veterans who entered active duty starting September 8, 1980, the eligibilty requirements are a bit stricter. The Veteran must have served at least 24 months or the full period for which called or ordered to active duty. those in service from August 2, 1990 to present are also eligible for this benefit.
Those hoping to qualify can seek out free help through a regional, state or county-level Veterans office or go to www.va.gov. Then click on locations and then click on State Veterans Affairs orrifces or Regional Benefit Offices. You can also email the Department of Veterans Affairs at www.iris.va.gov or call them at
1-877-294-6380. see more
Those hoping to qualify can seek out free help through a regional, state or county-level Veterans office or go to www.va.gov. Then click on locations and then click on State Veterans Affairs orrifces or Regional Benefit Offices. You can also email the Department of Veterans Affairs at www.iris.va.gov or call them at
1-877-294-6380. see more
Question
What happens if your parent's resources run out before the long term care insurance does?
From my research on this topic, you may be able to request a reduction in the policy's benefits so the premiums are affordable. You... From my research on this topic, you may be able to request a reduction in the policy's benefits so the premiums are affordable. You can do this by reducing the daily benefit amount, the number of years the policy will be in force or make other permissible changes (allowed by the LTC company) to try and make the premium more affordable.
I hope this would be a answer to the problem especially if they have paid the premium for the LTC policy for many years and do not want to lose the investment in the policy by needing to cancel. see more
I hope this would be a answer to the problem especially if they have paid the premium for the LTC policy for many years and do not want to lose the investment in the policy by needing to cancel. see more
Question
Can an illiterate spouse be a patient representative for social security?
1. If they could have a power of attorney prepared to have someone that the spouse would be comfortable having as their agent-in-fact (it... 1. If they could have a power of attorney prepared to have someone that the spouse would be comfortable having as their agent-in-fact (it could be another family member, but not a minor). This will also be key in the event that the literate spouse passes away and there would be someone to act on behalf of the illiterate spouse.
2. Utilize the services of an attorney. Although this may be expensive, the rights of both spouses would be protected and understood.
I hope this helps.
Take care and all the best,
Rosanne see more
2. Utilize the services of an attorney. Although this may be expensive, the rights of both spouses would be protected and understood.
I hope this helps.
Take care and all the best,
Rosanne see more
Question
How do I arrange for my elder father to go into assisted living only on social security?
The costs in an assisted living facility usually depend on the type of services your Dad will be utilizing there. If is for health... The costs in an assisted living facility usually depend on the type of services your Dad will be utilizing there. If is for health reasons, Medicare may cover qualified health care costs while your father is at the facility, but does not generally cover the "cost" of the facility. In some states, Medicaid my pay for some of the costs if your father is Medicaid eligible.
An excellent resource for your reader would be www.medicare.com/assisted-living and an alternative to the assisted living may be for him to stay at home. The great resource for this would be https://www.agingcare.com/Home-Care
If your Dad is a Veteran, he may be eligible for the Aid-and-Assistance Program sponsored by the Department of Veteran's Affairs. Those hoping to qualify can seek out free help through a regional, state or county-level Veterans office or go to www.va.gov. Then click on locations and then click on State Veteran Affairs offices or Regional Benefit offices. You can also email the Department of Veterans Affairs at www.iris.va.gov or call them at 1-877-294-6380. see more
An excellent resource for your reader would be www.medicare.com/assisted-living and an alternative to the assisted living may be for him to stay at home. The great resource for this would be https://www.agingcare.com/Home-Care
If your Dad is a Veteran, he may be eligible for the Aid-and-Assistance Program sponsored by the Department of Veteran's Affairs. Those hoping to qualify can seek out free help through a regional, state or county-level Veterans office or go to www.va.gov. Then click on locations and then click on State Veteran Affairs offices or Regional Benefit offices. You can also email the Department of Veterans Affairs at www.iris.va.gov or call them at 1-877-294-6380. see more
Question
Does the IRS waive penalties for the elderly that have forgotten to file their taxes?
Yes, the IRS may waive a penalty on a failure to file if you can show reasonable cause for not filing on time and it is not due to willful... Yes, the IRS may waive a penalty on a failure to file if you can show reasonable cause for not filing on time and it is not due to willful neglect. You may wish to set up a payment plan for your past taxes if finances are an issue. For the future, have an accountant set up estimated tax payments so there is no problem going forward.
You can contact the IRS to find out exactly what paperwork may need to be filed or review their website (which is actually very easy to understand) at www.irs.gov. The topic is known as "Frequently Asked Questions for Past Due Return Filers." You can also contact your local IRS office at 1-800-829-1040. see more
You can contact the IRS to find out exactly what paperwork may need to be filed or review their website (which is actually very easy to understand) at www.irs.gov. The topic is known as "Frequently Asked Questions for Past Due Return Filers." You can also contact your local IRS office at 1-800-829-1040. see more
Question
Should I drop my mother’s supplemental insurance now that she is on hospice?
Having been in the situation where I was the caregiver for my Mom, I truly know how much some free time can mean to the caregiver. I would... Having been in the situation where I was the caregiver for my Mom, I truly know how much some free time can mean to the caregiver. I would recommend you continue paying the supplemental care. Having that bit of "breathing room", as I used to call it, does re-energize you and give you some quality time for yourself. You, as the caregiver, need to take good care of yourself as well...for yourself and your family. see more
Can I claim my mother on my taxes?
You may be able to claim your parents as a dependent on your tax returns if you pass the IRS’s Dependency Test. If your parent meets the IRS’s Dependency Requirements, you’ll be able to claim an added personal exemption on your income tax return. The exemption amount is adjusted annually for inflation and can be found on your tax return form. Second, you can count any medical expenses you pay for mom or dad toward another itemized deduction. Since medical costs must exceed 7.5% of your adjusted gross income before you can claim them, a parent’s added expenses could help you meet the requirement. When adding up those parental medical costs, don’t forget premiums for supplementary Medicare coverage or long-term care insurance.
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 income (see dependency test #1) but met the other tests, the IRS says mom or dad still could be counted as a dependent for medical-deduction purposes.
Another additional tax benefit is available for people whose dependent adult parents live in their home. If the adult child works (or is looking for work) and has to pay for care of the parent to make their own employment possible, the expenses can qualify for the dependent care credit or for pre-tax payment through an employer-sponsored flexible spending arrangement (FSA). For 2009, the maximum dependent care credit is $3,000 for the care of one dependent. This tax break phases out with your income, so check with your tax adviser.
Last, if you are working at a company that offers a plan that allows for pre-tax deduction of dependent care and/or health care expenses, you can use those dollars for items not eligible for the Medical Expense Deduction or for relief if you will not be able to itemize. This is a great way to get your tax break now instead of later, so be sure to take advantage of it.
The IRS website, www.irs.gov or IRS Publications 501 and 503 provide information on the Dependency Requirements as well as any Exemptions you may claim. see more