How to Deduct Long-Term Care Costs

You can write off assisted living expenses if you itemize and meet certain tests.

My 94-year-old mother had to move to assisted living (not a nursing home) last year because she was no longer able to care for herself. Her doctor certified she could not bathe, dress or feed herself due to dementia and loss of mobility. The assisted-living home provided food and lodging and aided her with medicines and bathing, all of which cost $3,000 per month. Can the cost be deducted as a medical expense on my mother's federal income-tax return?

She may be able to deduct those costs if they aren't covered by insurance. Qualified long-term care expenses can be tax-deductible if they are for diagnostic, preventive, treatment or rehabilitative services, or for personal care required by someone who is chronically ill. The services must be prescribed by a licensed health-care practitioner.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.