Why Caregiver Tax Benefits Matter
Family caregivers often absorb hidden costs: out-of-pocket medical expenses, transportation, meals, and time off work. What many don’t realize is that the IRS offers a range of tax benefits that may help offset these costs—if families know how to access them.
Some caregivers may qualify to claim a dependent, deduct medical expenses, or take advantage of the Child and Dependent Care Credit. But determining eligibility can be nuanced. It requires careful coordination between financial advisors, tax professionals, and other trusted professionals who understand the client’s full picture.
Commonly Overlooked Tax Breaks for Caregivers
Here are a few potential benefits caregivers may be eligible for—especially when supported by a team of professionals working in sync:
- Claiming a parent or loved one as a dependent, which can offer exemptions or credits depending on income thresholds.
- Medical expense deductions for out-of-pocket care, medications, or home modifications—especially when expenses exceed 7.5% of adjusted gross income.
- Child and Dependent Care Credit, which may apply even when the dependent is an adult requiring supervision or care while the caregiver works.
- Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs), which can be powerful tools for managing qualified expenses.
- State-level credits or benefits, which vary but can provide additional financial relief if clients are guided through the application or documentation process.
These tax breaks can be difficult to navigate alone, which is why clients benefit most when their professional team—attorneys, CPAs, and financial advisors—work collaboratively.
Combining Experience = Better Outcomes
Each of us plays a vital role in helping families thrive. But when we come together—sharing insight, strategy, and support—we can guide clients more effectively through complex decisions.
For example:
- A financial advisor may notice a client’s caregiving role during a retirement review.
- A CPA can help determine whether caregiving-related deductions are being missed.
- An estate planning attorney may flag a need for updated documents as caregiving responsibilities evolve.
When we share what we’re seeing and anticipate what’s coming next, we become a trusted circle of support that empowers clients to move forward with clarity and confidence.
Planning With Empathy
Tax planning isn’t just about the numbers. It’s about understanding the emotional and financial weight caregivers carry. Many are caught between raising their children, supporting aging parents, and preparing for their own future—all at once.
By working together across disciplines, we offer something powerful: peace of mind. We show clients that they don’t have to do it alone—and that a thoughtful, personalized strategy can ease the burden.
Let’s Keep the Conversation Going
As caregiving becomes more common in the families we serve, the need for integrated support will only grow. Whether it’s clarifying tax benefits or building a financial plan that includes caregiving costs, there’s an opportunity to work hand-in-hand to guide people through their most important transitions.
Let’s continue to learn from each other, refer when it makes sense, and combine our strengths. Together, we can help clients care for their loved ones and protect their future.
Caregiving #RetirementPlanning #WealthProtection#TrustYourAdvisor #FinancialIndependence
The concepts illustrated here have legal, accounting and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your individual circumstances. For more information about Janney, please see Janney's Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
