In The News

February newsletter topics include how to stay virus free this winter, fun local activities, a yummy Creole recipe and heart health information.  View our newsletter here.

A study published in Nature Neuroscience looked at the natural brain changes that happen as we age and their impact on memory.  As we get older the quality of our sleep declines due to changes in the prefrontal cortex, and these sleep changes are linked to declining memory. While sleep is not the only factor that affects memory and cognitive function as we age, it does appear to play a critical role in how we remember things.  Read the full New York Times’ article Aging in Brain Found to Hurt Sleep Needed for Memory.

There are many routine preventive screenings that Medicare covers at no cost to you.  These include a yearly wellness visit, cardiovascular screening every 5 years, yearly mammogram for women ages 40+ as well as certain shots.  Cervical and vaginal cancer screenings and prostate and colorectal cancer screenings are also covered with restrictions on age, sex, and frequency based on which test is being performed.  For more information on what Medicare covers, click here.

January newsletter topics include cervical health information, our recommended reading, local lawn care spotlight, and much more!  View our newsletter here.

The CDC is reporting high levels of influenza-like illness across the United States, and South Carolina is one of 29 states that reported high activity for the week ending December 29.  Reports of severe illness, hospitalizations, and several deaths have health officials urging everyone who has not been vaccinated to get vaccinated.  Being vaccinated does not guarantee you will not get the flu, however.  If you suspect you have the flu, a visit to your healthcare provider can determine whether or not you should start an antiviral treatment.  These treatments are most effective when they are started as early as possible once you become ill.  For more information, visit the Centers for Disease Control and Prevention’s website.

Agingcare.com has compiled a list of the most asked tax questions by caregivers complete with answers from the IRS to help you sort through the confusing tax code.

Answers to Tax Questions Caregivers Ask Most

by Marlo Sollitto

With tax time comes rules, exceptions, exemptions, requirements – and lots of confusion. AgingCare.com has gathered a list of frequently asked questions that caregivers ask most, with responses from the IRS website.

I am a caregiver and my elderly parent lives in my home. Can I claim my parent as a dependent on my tax return?

You may claim your parent as a dependent if the following tests are met:

1. You are not a dependent of another taxpayer.
2. Your parent does not file a joint return.
3. Your parent is a U.S. citizen, U.S. national, U.S. resident, or a resident of Canada or Mexico.
4. You paid more than half of your parent’s support for the calendar year.
5. Your parent’s gross income for the calendar year was less than the exemption amount.
6. Your parent DOES NOT have to live with you in order to claim them as a dependent, if you’ve meet the above criteria. Relatives who quality who do not have to live with you include: mother, father, grandparent, stepmother, stepfather, mother-in-law, father-in-law.

See Publication 17, Your Federal Income Tax, and Table 3-1 on page 27, “Overview of the Rules for Claiming an exemption for a Dependent.”

I am a caregiver and my elderly parent lives in my home. Can I file as head of household?

You may file as head of household if you meet the following requirements.

1. You are unmarried or “considered unmarried” on the last day of the year.
2. You may claim a dependency exemption for your parent.
3. You paid more than half the cost of keeping up a home for your parent for the tax year.

Your dependent parent does not have to live with you. Your parent DOES NOT have to live with you in order to claim them as a dependent, if you’ve meet the above criteria. Relatives who quality who do not have to live with you include: mother, father, grandparent, stepmother, stepfather, mother-in-law, father-in-law.

See Special rule for Parent , in Publication 17, under Qualifying Person. See also Publication 501: Exemptions, Standard Deduction, and Filing Information.

Can I claim a medical expense for modifications I made to my home to accommodate my parent’s medical condition?

My parents occasionally give me money to offset some of the cost of their care. Do I have to pay taxes on this money?

An amount of money that your parents give you to offset their expenses is not taxable to you, however, you should take this amount into account in determining whether your parents are your dependents.

See Publication 501, Exemptions, Standard Deduction, and Filing Information

I pay for some of my parent’s expenses medical expenses. Can I deduct these expenses on my tax return?

If you can claim your parent as a dependent, you also may be able to claim a deduction for the portion of your parent’s medical or dental expenses that you paid. However, your total deduction for medical and dental expenses must be reduced by 7.5 percent of your adjusted gross income.

See Publication 17, pages 140-144, for additional information. See also Publication 501, Exemptions, Standard Deduction, and Filing Information; Publication 502, Medical and Dental Expenses.

My parent is suffering from dementia. I cash his/her monthly social security check and use the proceeds for his/her care. What are the tax consequences?

Your parent’s social security benefits are not taxable to you. However, in determining whether your parent is your dependent, you should consider the benefits used for your parent’s support as support provided by your parent.

See Publication 501, Exemptions, Standard Deduction, and Filing Information, for additional information.

My parent signed his/her home over to me. Does this transaction have to be reported to the IRS?

Yes. If certain conditions apply, this transaction would be considered a taxable gift from your parent to you. Generally, your parent must file a gift tax return ( Form 709) if any of the following apply:

1. Your parent gave gifts to at least one person (other than his/her spouse) that are more than the annual exclusion for the year. Check Publication 950 for the 2012 annual exclusion.
2. Your parent and his/her spouse are splitting a gift.
3. Your parent gave someone (other than his/her spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
4. Your parent gave his/her spouse an interest in property that will be ended by some future event

NOTE: If any of the above conditions apply, your parent is required to file a Form 709, even if a gift tax is not payable.

See Publication 950 for additional information on gifts.

I received a death benefit from my parent’s life insurance policy. Do I have to pay taxes on that money?

Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, interest income received as a result of life insurance proceeds may be taxable.

See Publication 525 for additional information.

Links to IRS documents listed in this article

Publication 17: Your Federal Income Tax

Publication 501: Exemptions, Standard Deductions and Filing Information

Publication 502: Medical and Dental Expenses

Publication 523: Selling Your Home

Publication 525: Taxable and Non-Taxable Income

Publication 950: Estate and Gift Taxes

Agingcare.com is a leading online community that connects people

caring for elderly parents to other caregivers, personalized

information, and local resources. Agingcare.com has become the trusted

resource for exchanging ideas, sharing conversations and finding

credible information for those seeking elder care solutions. For more

information, visit www.agingcare.com.

Studies show that even regular exercise can’t protect against pericardial fat if you spend too much of your day sitting.  This type of fat accumulation around the heart is closely related to cardiovascular disease.  Many people spend 8 plus hours a day at a desk, and then tack on a few more hours sitting on the couch in front of the tv.  This kind of continuous inactivity is bad for your ticker regardless of whether you put in a daily workout.  Consider standing while you talk on the phone or take a short walk every couple of hours.  Instead of sitting on the couch, stretch while you watch tv.  For more information, read Too Much Sitting Linked to Fat Buildup Around the Heart at healthfinder.gov.

December newsletter topics include understanding the stages of Alzheimer’s, dealing with sibling criticism during the holidays, better hand washing hygiene and much more.  Read our newsletter here.

Article from the National Care Planning Council:

At some point in our lives we may ask ourselves: “If I die and have debt, who or what will be responsible for paying back those I owe?”

The laws regarding debt after death are defined by each state so there isn’t a single answer to the question above for everyone. On most occasions, the only time a family member would be responsible for your debt is if they cosigned a loan with you. People generally do not inherit another person’s debt.

When we die, a new entity emerges, called our estate. An “Estate” represents your assets and your liabilities. Upon death, a legal process called “Probate” (which is the first step of administering the estate of a deceased person), will resolve your debts and distribute your remaining assets to your heir(s).

Creditors may legally seize assets within your estate (money or property) in order to cure a debt owed to them. If you have no assets, your creditors may have to take a loss on your debts. Depending on the state you live in, a creditor has a fixed amount of time to make a claim against your estate for payment.

There is a legal pecking order as to who is allowed first claim to retrieve money from your estate. The higher priority goes to funeral expenses, administrative expenses, and federal taxes. The estate may then pay off expenses from the last illness and state taxes. At the bottom of the barrel are unsecured creditors, like credit card companies.

Generally, all debts must first be paid by the estate before any remaining assets are distributed to an heir. An outstanding credit card balance, for example, must be paid before any money or gifts can be distributed to an heir. If there are not enough assets to pay the debts, then all assets and property will be sold to pay down as much of the debt as possible and the heir will inherit nothing.

In the case of secured debts (e.g. home mortgage or auto loans), property (which is collateral) may be distributed with its debt. For example, you own a car worth $15,000 and the loan on the car is $7,500. If you die and leave that car to someone, it will become that person’s obligation to pay off the loan.

Except for certain situations (which include joint property or joint debt), creditors are unlikely to go after surviving family members when a debt cannot be paid by your estate money. The majority of married couples have joint accounts and joint debt. In these situations, a surviving spouse will be held legally responsible for the debt of their deceased spouse even if they did not generate the debt themselves. This is something that will often cause problems for surviving spouses who financially cannot pay off old debt and meet their everyday needs.

If a creditor contacts a surviving family member about a debt of a relative who has died, the family member should give the creditor the contact information of the decedent’s representative. The representative is responsible for paying any outstanding debts from the estate. If a will exists, the representative is known as the executor; if there is no will, the representative is known as the administrator.

In community property states (where married couples are considered to own their property, assets, and income jointly) credit accounts opened during marriage are automatically considered to be joint accounts. This could affect what your spouse will have to pay, depending on the debt that you incurred. The following states are community property states:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

To conclude, when you pass away, your estate is responsible for paying off any balances owed by you, not your family. If your estate goes through probate, your administrator (or executor) will look at your debts and assets and, guided by the laws of your state, determine in what order your bills should be paid. The remaining assets will be distributed to your heirs according to your will or state law.