Medical deduction now covers home health care costs

Article Abstract:

The Health Insurance Portability and Accountability Act of 1996 enables children to keep their aged parents out of a nursing home at a lower cost. It allows them to enjoy the expanded definition of medical care, which now applies to expenses related to home care. Therefore, taxpayers can now deduct on their own returns certain home care expenses incurred by their parents, thereby lowering the effective cost of home care and increasing its attractiveness. The Internal Revenue Code, particularly Sec 7702B(c) defines major terms for ascertaining eligibility under this new category of deductible expenses. Planning tips are discussed for substantiation, multiple support agreement, timing of payments and other tax considerations.

Home health care services, Home Health Care, Tax deductions, Medical care, Cost of, Health care costs, Home care services, Home care

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Service issues new safe harbor method for distributions from qualified plans

Article Abstract:

The IRS has made available a simplified method by which the taxable portion of annuity distributions from qualified retirement plans may be calculated. Details of when and how this safe harbor method may be used are presented.

Investments, United States. Internal Revenue Service

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