By proceeding, I agree that I understand the following disclosures:
I. How We Work in Washington. Based on your preferences, we provide you with information about one or more of our contracted senior living providers ("Participating Communities") and provide your Senior Living Care Information to Participating Communities. The Participating Communities may contact you directly regarding their services. APFM does not endorse or recommend any provider. It is your sole responsibility to select the appropriate care for yourself or your loved one. We work with both you and the Participating Communities in your search. We do not permit our Advisors to have an ownership interest in Participating Communities.
II. How We Are Paid. We do not charge you any fee – we are paid by the Participating Communities. Some Participating Communities pay us a percentage of the first month's standard rate for the rent and care services you select. We invoice these fees after the senior moves in.
III. When We Tour. APFM tours certain Participating Communities in Washington (typically more in metropolitan areas than in rural areas.) During the 12 month period prior to December 31, 2017, we toured 86.2% of Participating Communities with capacity for 20 or more residents.
IV. No Obligation or Commitment. You have no obligation to use or to continue to use our services. Because you pay no fee to us, you will never need to ask for a refund.
V. Complaints. Please contact our Family Feedback Line at (866) 584-7340 or
[email protected] to report any complaint. Consumers have many avenues to address a dispute with any referral service company, including the right to file a complaint with the Attorney General's office at: Consumer Protection Division, 800 5th Avenue, Ste. 2000, Seattle, 98104 or 800-551-4636.
VI. No Waiver of Your Rights. APFM does not (and may not) require or even ask consumers seeking senior housing or care services in Washington State to sign waivers of liability for losses of personal property or injury or to sign waivers of any rights established under law.I agree that: A.I authorize A Place For Mom ("APFM") to collect certain personal and contact detail information, as well as relevant health care information about me or from me about the senior family member or relative I am assisting ("Senior Living Care Information"). B.APFM may provide information to me electronically. My electronic signature on agreements and documents has the same effect as if I signed them in ink. C.APFM may send all communications to me electronically via e-mail or by access to an APFM web site. D.If I want a paper copy, I can print a copy of the Disclosures or download the Disclosures for my records. E.This E-Sign Acknowledgement and Authorization applies to these Disclosures and all future Disclosures related to APFM's services, unless I revoke my authorization. You may revoke this authorization in writing at any time (except where we have already disclosed information before receiving your revocation.) This authorization will expire after one year. F.You consent to APFM's reaching out to you using a phone system than can auto-dial numbers (we miss rotary phones, too!), but this consent is not required to use our service.
*If I am consenting on behalf of someone else, I have the proper authorization to do so. By clicking Get My Results, you agree to our
Privacy Policy. You also consent to receive calls and texts, which may be autodialed, from us and our customer communities. Your consent is not a condition to using our service. Please visit our
Terms of Use. for information about our privacy practices.
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
Speak to an elder care attorney or accountant. There are also some excellent publications on the IRS website.