are assisted living costs a deductible expense?

*Some* of the costs for assisted living might be deductible as medical expenses, but not all of them.   You should be able to get a breakdown from the care facility of the fees that can be claimed as medical expenses.

MEDICAL EXPENSES

The medical expense deduction has to meet a rather large threshold before it can affect your return. The amount of medical (including dental, vision, etc.)  expenses that will count toward itemization is the amount that is OVER 7.5% of your adjusted gross income. You should only enter the amount that you paid in 2024—do not include any amounts that were covered by insurance or that are still outstanding.  Of course, your medical expenses plus your other itemized deductions still have to exceed your standard deduction before you will see a difference in your tax due or refund.

To enter your medical expenses go to Federal>Deductions and Credits>Medical>Medical Expenses

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY            $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

Yes, if you are itemizing your return you can deduct some, most or all of the assisted living costs.

 How much depends on why you are there.  If you are itemizing your return you can deduct the medical part of the assisted living costs.  You can deduct the costs of room and board and medical treatment if you are there for medical reasons such as dementia or physical rehabilitation. 

If your primary reason for being there is for convenience and not medical purposes, then you cannot include any part of the costs that are not directly medical related.  You would still be able to deduct the medical components such as medications. 

Be aware that medical expenses are only deductible for the amount that is over 7.5% of your AGI and that in order to benefit from this deduction your total itemized expenses would need to be greater than your standard deduction.

Itemized expenses include mortgage interest, gambling losses up to winnings,  charitable contributions, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss.

The 2024 Standard Deductions are as follows:

• Married Filing Joint (MFJ)              $29,200
• Married Filing Separate (MFS)      $14,600
• Head of Household (HOH)             $21,900 
• Single                                                 $14,600                                

Blind or over 65 and MFJ or MFS add $1,550

Single or HOH if blind or over 65 add $1,950

Standard versus Itemized Deduction

Publication 502 (2024), Medical and Dental Expenses

You can always deduct costs for medical care.  This includes nursing care, even if not provided by a nurse (assistance with medications, dressing, continence, eating, and so on.)  The facility should break that out for you.

You can deduct the entire cost if you meet three tests:

1. You are receiving care because of a chronic disability, including cognitive disability that is certified by a doctor

2. You require assistance with 2 or more activities of daily living (ADLs are eating, dressing, bathing, toileting, managing incontinence, and transferring).

3. Care at the assisted living facility is according to a written plan developed by a qualified care provider (doctor, social worker, etc) that is reviewed and updated at least once a year.