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Medical Tax Deductions – 2018

The deduction for qualified medical expenses has survived yet another round of tax reform.  The IRS will allow a tax payer to deduct expenses that exceed 7.5% of their adjusted gross income for 2017 and 2018.  Beginning in 2019, all taxpayers may deduct only the amount of the total unreimbursed allowable medical care expenses for the year that exceeds 10% of their adjusted gross income.

For example, if you have a modified adjusted gross income of $50,000 and $5,470 of medical expenses, you would multiply $50,000 by 0.075 (7.5 percent) to find that only the expenses exceeding $3,750 can be deducted. This leaves you with a medical expense deduction of $1,720 (5,470 – 3,750).

Many elders who have been ordered into a professional care environment such as assisted living, may have qualified care expenses of $30,000, $40,000 or more annually.  Often times, the elder relies on other parties such as their children to supplement their care expenses.  Regardless of the amount, “anyone” who is contributing to the direct care expenses of themselves or a loved one, should seek qualified tax services from an Enrolled Agent or CPA to determine if those expenses are deductible.  Considering the a mount of money and complexity of claiming these expenses, I do not recommend using on-line Internet Tax or Shopping Mall type tax preparation services.  Many of these face to face data collection persons are customer service agents with minimal, if any, actual tax training or credentials.  You have the right to claim these deductions – if it is done properly.

Also, for those who used an Irrevocable Trust to re-position assets, you should meet with your Attorney, Enrolled Agent or CPA to discuss if you will be required to file a 1041 tax return.

One big tip for those receiving VA Aid and Attendance.  Some professionals recommend you file a 1040 and claim your care expenses – even if you are exempt from filing.  Remember, the VA is tasked with verifying your care expenses exceed your income annually.  By filing the 1040, it makes their job easy.  By not filing a 1040, make certain you keep a close eye for any correspondence from the VA.  If you fail to respond timely, they may terminate your monthly benefit.

Source: https://www.advancedwellnessgcm.com/

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VA Disbursements have Increased

Helen Justice, Geriatric Care Manager, at Advanced Wellness, published an informative article on updates to VA disbursements:

Are you a War-Time Veteran or Widow of War Time Veteran?

There are Financial Benefits available for War Time Veteran and Widow of War Time Veteran to help defray the cost for senior placement Assisted Living Facilities, Board and Care Homes, and In-Home Care. There is a non-service connection pension cal Aid and Attendance Pension Plan. This was established in 1954 under Section 38 USC to assist qualified veterans and their surviving spouses.

And the amounts have just increased:

Current Maximum VA Monthly Benefit Amounts

  • Two Veterans/ Spouses: $2,903 per month / $34,837 annually
  • Married Veteran: $2,169 per month / $26,036 annually
  • Single Veterans: $1,830 per month / $21,962 annually
  • Widow: $1,176 per month / $14,113 annually

What are the qualifications?
The Veteran Must:

  • Be aged 65+ or Unemployable
  • Be Honorably Discharged having 90 days or more of active duty service with at least one of those days during a period of War. This does not mean they needed to be in War Country.
  • Have Cost of Care that is 5% greater than their fixed income.
  • Eligible Veterans must show active duty service for a minimal 90 days during a time in which the US was involved during a declared conflict (from 1980 forward the veteran needs to serve 2 years active duty).
  • You must need assistance with activity of daily living (ADLs) (bathing, eating, dressing, hygiene, transferring, and medication management). Your doctor will provide a report that you need assistance with at least of two ADLs.

You can contact Helen directly at her website, or call our office and we’ll get you going in the right direction. Our toll-free number is: 866-988-3956.

Source:  Advanced Wellness Geriatric Care

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http://www.benefits.va.gov/compensation/claims-postservice-agent_orange.asp

Veteran’s Affairs (VA) maintains a list of U.S. Navy and Coast Guard ships associated with military service in Vietnam and possible exposure to Agent Orange based on military records. This evolving list helps Veterans who served aboard ships, including “Blue Water Veterans,” find out if they may qualify for presumption of herbicide exposure. Veterans must meet VA’s criteria for service in Vietnam, which includes aboard boats on the inland waterways or brief visits ashore, to be presumed to have been exposed to herbicides. Veterans who qualify for presumption of herbicide exposure are not required to show they were exposed to Agent Orange or other herbicides when seeking VA compensation for diseases related to Agent Orange exposure.

http://www.benefits.va.gov/compensation/claims-postservice-agent_orange.asp

Ships will be regularly added to the list based on information confirmed in official records of ship operations. Currently there are 344 ships on this list. A Veteran must file an Agent-Orange related disability claim before VA will conduct research on a specific ship not on VA’s ships list. This requirement also applies to survivors and children with birth defects.