Spouse injured? Salvage three tax breaks — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Spouse injured? Salvage three tax breaks

Get PDF file

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Suppose your working spouse is injured and put out of commission for a while.

Strategy: Turn misfortune into tax savings. Depending on your situation, you might qualify for one, two or even three tax breaks.

Tax break #1: For starters, you may claim the dependent care credit for the cost of caring for a one spouse while the other one works. It’s a common misconception that the credit is limited to child care expenses. Generally, the credit is equal to 20% of the first $3,000 of expenses. Therefore, if you pay a nursing aide $500 a week for six weeks, you can slice your 2017 tax bill by $600.

Tax break #2: In addition, you may qualify for a medical expense deduction for costs incurred to care for your injured spouse. Qualified expenses include nursing care and things like crutches or a rented hospital bed needed for rehabilitation. Note that the caregiver doesn’t have to be a registered nurse. Reminder: Under the current rules, you can only deduct unreimbursed medical costs to the extent they exceed 10% of your adjusted gross income for 2017.

Tax break #3: Finally, you can donate medical items to a charity when they’re no longer needed. For instance, you might give the crutches to a local health clinic. Typically, you may deduct the item’s fair market value on the date of the donation.

Tip: There’s no prohibition against multiple tax benefits for the same expense as long as it qualifies separately under the rules.

Leave a Comment

Previous post:

Next post: