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Ask the Expert: Can I deduct assisted-living expenses?

I live in an assisted-living facility. I'm on a fixed income of Social Security and a pension. Just about all of my income goes to living in assisted living, which is now about $5,500 a month. Can I deduct any of this cost when I do my taxes?

The cost of room and board in assisted living isn't deductible unless a doctor or nurse has certified you as "chronically ill" and you're in the facility primarily for medical care. But the portion of your monthly bill that represents medical services not covered by insurance is potentially tax deductible. The facility can tell you what part of your fees is attributable to qualifying medical costs.

But it may not make financial sense for you to claim a tax deduction for them.

Here's why:

1) Medical expenses are only deductible to the extent that they exceed 7.5% of your adjusted gross income. Let's say you had $6,000 of medical expenses. If your 2020 income was $60,000, you can only deduct expenses above $4,500 (7.5% of $60,000); so only $1,500 would be deductible.

2) To claim medical expenses, you must file a tax return that itemizes deductions instead of taking the standard deduction. Itemizing lets you also claim deductions for your state and local income taxes or sales taxes, up to $10,000; your mortgage interest; disaster losses from a federally declared disaster; and charitable donations.

But for most people, the standard deduction works out better. For example, the standard deduction for a single taxpayer who's 65 years old or older is $14,050. It doesn't make sense for that taxpayer to itemize his deductions unless they add up to more than $14,050.

The bottom line

For most taxpayers, taking the standard deduction results in a smaller tax bill or a bigger refund than itemizing.

More information

nwsdy.li/ElderLawtaxdeductions

irs.gov/taxtopics/tc501

TO ASK THE EXPERT Send questions to act2@newsday.com. Include your name, address and phone numbers. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own consultants for your specific needs.

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