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Is Rent for Assisted Living Tax Deductible?
Date Updated: July 26, 2024
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Rent for assisted living may be partly tax deductible for eligible individuals. It’s important to note that while you cannot deduct the cost of room and board on your tax return, the portion of your rent that goes towards medical expenses is deductible.
Who can deduct assisted living rent from taxes?
You can deduct assisted living rent from taxes if a portion of this cost includes medical services. To claim this tax incentive, you must itemize your deduction rather than taking the standard deduction. In addition, medical expenses don’t become deductible until they exceed 7.5% of your adjusted gross income.
If you aren’t sure if your assisted living expenses qualify for deduction, the IRS has an online tool to help. Some individuals benefit from consulting with a tax professional before deciding to itemize deductions and claim medical expenses.
How does the IRS define adjusted gross income for tax deductions?
The IRS defines adjusted gross income for tax deductions as your gross income minus certain adjustments. Gross income covers all the income you receive, such as wages and salary from a job, stock dividends, investment interest, business income and capital gains. Adjustments to gross income include retirement account contributions, health insurance premium costs and half of your self-employment taxes if you own a business.
Look at last year’s tax return to estimate your adjusted gross income if you aren’t sure. Then, compare that number to your medical expenses to see if you qualify for this deduction.
How do you deduct assisted living rent from taxes?
You deduct assisted living rent from taxes by filing Schedule A of Form 1040 with your income tax return. Enter the deductible portion of your assisted living expenses on Line 11. The IRS doesn’t require you to submit supporting paperwork, but you should save your receipts for deductible costs for your records.