Coupons via social media are another way scam artists are trying to get personal information to conduct identity thefts, according to AARP’s FraudWatch network.
Typically, scam artists invite users to click on a link and share it with their friends to receive a free coupon. Consumers are then asked to fill out a survey and enter personal information. Once this done, they may have signed up for a fake rewards card that charges monthly fees for nothing but bogus offers.
Consumers should not enter any personal information and only get online coupons directly from a company’s website, AARP recommends.
AARP FraudWatch is working to educate the public to prevent scams, which are on the rise.
For more information, go to www.aarp.org/fraudwatchnetwork or call 1-877-908-3360.
With over a million Americans living in assisted living communities across the country, families need to be aware of tax deductions that can save them money in the expensive world of senior care.
Navigating the details of tax preparation can be daunting; especially when you add in the complexities of assisted living care and medical costs. Fortunately there are ways that seniors and caregivers can get tax deductions for assisted living.
How to Plan Ahead
With over a million seniors living in more than 28,000 assisted living facilities in the U.S., according to a recent CDC study about national long-term care providers, assisted living has become big business with today’s exponentially aging population. Many seniors and their families are paying with their own resources upwards of $3,600 a month for a one-bedroom apartment, depending on the location and needs of their loved ones.
It’s no secret that consumers are paying a lot of money out-of-pocket for assisted living and, luckily, if the assisted living costs can be characterized as medical or dental expenses, families can often get a tax break.
Andy Smith, CFP®, Executive VP of Investments at The Mutual Fund Store and A Place for Mom Advisory Board member, provides financial planning to families on a daily basis and was kind enough to offer his expert guidance on tax deductions for assisted living. Here are some of his initial thoughts:
“The average retirement healthcare costs for a 65-year-old couple is $241,000. Unfortunately most people don’t plan for this early, or they find out to late in the process that they need to drastically change their long-term plans. The tax deduction is a definite help. It’s important to meet with your advisor and CPA to learn about this deduction early in the process.”
Smith notes that taxes should be considered when discussing retirement and senior care, early in the process and initial discussions, if possible. “Consider this as part of a larger whole of everything you and your loved ones really should be doing with your long-term retirement — and retirement living — plan,” he notes. By keeping excellent records, asking questions and getting help from a professional, you’ll most likely save some money.
The Assisted Living Tax Deduction
Diligent record keeping throughout the year, even for related expenses like mileage from doctor visits, can add up to a lot of write-offs come tax time. If you want to help ease the financial burden, you need to learn what you can and can’t deduct as well as keep excellent records and hold onto receipts. This diligent record-keeping you’ll be well prepared to qualify for write-offs.
It’s important to note that the taxpayer must be entitled to itemize deductions. However, other requirements differ depending on whether the taxpayer is the senior or the caregiver.
What Counts as a Write Off?
Generally, anything that is directly related to the individual’s medical care, including health or Medicare insurance, long-term care insurance, eyewear, hospitals, hearing aids and so forth, qualifies as a medical expense. You can find a complete list in IRS Publication 502. As far as the actual monthly cost of assisted living, there are stipulations.
For example, according to Smith, a facility like a nursing home is easy to take a deduction on, but it’s not so simple when it comes to assisted living:
“Nursing homes are primarily used for medical care, and medical care is always deductible. However, assisted living can sometimes be a function of a safety or companionship issue, rather than a medical issue. That’s why deductibility in those instances is not always a cut-and-dried matter.”
Married couples filing tax returns separately often have different requirements. This is when a financial advisor can help answer whether you qualify for assisted living write-offs.
Senior Tax Payer
If you’re preparing taxes on a senior’s behalf, you can deduct qualified medical expenses the taxpayer paid for during the tax year. Sometimes a doctor has to certify the senior’s medical condition to verify the medical expenses.
Caregiver Tax Payer
In order to qualify for deductions, you’ll need to do the following:
- Find out whether your loved one qualifies as a dependent.
- Make sure your loved one is a U.S. citizen or national, or a resident of the U.S., Canada or Mexico.
- You can deduct qualified medical and dental expenses on your tax return only if you provided more than half of your loved one’s support.
- You can deduct medical expenses if you are part of a collective group of individuals or family caregivers who provide more than half of your loved one’s support.
- If you qualify for the caregiver tax deduction, you will also be allowed to take a dependency exemption for that individual.
Caregivers need to also be aware that, according to the IRS, Publication 502, expenses can only be deducted if the senior has been your dependent either at the time the medical services were provided, or at the time you paid the expenses.
There may also be different requirements for married couples filing separate returns, so make sure to check with a financial advisor if you’re not sure whether you qualify for assisted living write-offs.
How Much Can You Deduct for Assisted Living?
It’s important to be aware that there are limits to how much you can deduct for qualified medical expenses when using the assisted living tax deduction. Business Management Daily notes that, “Although the deduction floor for medical expenses has increased to 10% of adjusted gross income (AGI), beginning in 2013, it remains at 7.5% of AGI through 2016 for taxpayers who were age 65 or older as of Dec. 31, 2013.”
That means, if either you or your spouse was born before January 2, 1950, the threshold is lower, and you can start claiming tax deductions for any medical expenses in excess of 7.5% of AGI. For example, if you are over 65, your AGI is $40,000, 7.5% of which is $3,000, and you have $4,000 worth of qualifying medical expenses, you can deduct $1,000 worth of expenses.
Tax Preparation is Key
Smith urges to be prepared for for taxes as there are a few things to keep in mind when getting paperwork together. He notes to keep these things in mind to make organization and preparation easier; whether you’re preparing the taxes yourself, or having a professional preparing them for yourself or your senior family member:
“Be sure to track down all paperwork in advance. It’s important to be aware of medical and dental visits and have all the information handy. It’s helpful to have your loved one’s previous years’ tax returns available to see the type of expenses they had in the past. If needed, you can obtain a transcript of income received the the individual from the IRS, which can help when filling out the 1040.”
Also, find out whether the following apply to your unique situation:
- Whether you are eligible to deduct insurance premiums. Not every policy is tax-qualified, especially when it comes to long-term care insurance. Check with the policy holder to make sure the policy qualifies and, if it does, you can deduct premiums as medical expenses.
- Determine whether assisted living entrance fees apply. If the community charges an entrance or initiation fee directly related to medical care, those charges are deductible.
Assisted Living Tax Preparation Resources
The following resources can provide more detailed assisted living tax preparation information:
- IRS Publication 502: Medical and Dental Expenses has a complete list of allowable expenses.
- IRS Publication 501: Exemptions, Standard Deductions and Filing Information to learn more about claiming the person with dementia as a dependent.
- Alzheimer’s Association: Detailed overview of tax deductions and credits that are available for out-of-pocket medical expenses paid by families caring for a loved one with Alzheimer’s at home.
- Assisted Living Federation of America: Detailed information about costs of assisted living.
- IRS.gov: Detailed overview of tax information for unique family situations.
If you are looking for additional tax tips, don’t forget to read our article on Senior Tax Credit.
Do you have tax tips for families looking for additional credits and deductions? Share them with us in the comments below.
reprinted from Maine Senior Guide
How to Notice There’s A Problem With Your Aging Parents
When faced with a decision about senior living, many seniors and their families find themselves in a whirlwind of information-gathering that is more daunting than at any other time in their lives. We suddenly find ourselves needing to be experts on complex issues in a very short period of time.
Fortunately, there is help. A Place for Mom, North America’s largest senior referral service, pooled its years of expertise to create this e-book called the Senior Living Planning Guide. The guide walks you through the major steps of choosing assisted living based on your specific needs and priorities. Download the Senior Living Planning Guide and keep it with you at every stage of the process – from touring communities, to managing finances, to moving in. Here is what you’ll find in the Senior Living Planning Guide.
Senior Living Types Explained
The first part of the e-book guides you through the different types of senior living. It explains the differences between senior apartments, independent living, assisted living, memory care, and the entire continuum of care one may need. It also includes a glossary of common terms for your reference as you move through the transition into senior living. With this quick reference by your side, you can confidently discuss various living arrangements and take notes about which one suits you best.
- For Active, Healthy Seniors – you’ll know the differences between 55 and over apartments vs independent living facilities.
- For Seniors Who Need Daily Support – we compare assisted living, residential care homes, memory care and nursing homes.
- For Seniors Who Live at Home – there are options for home care, respite care and adult day care
Understanding the fundamental differences between each senior living type will help you focus on more important issues, like location, amenities and services at any given community.
Paying for Senior Living
Paying for senior care is often the primary deterrent in making a decision – and with good reason. There are many things to consider, and often these issues are not discussed with other family members. The Senior Planning Guide helps you have those conversations.
What does senior living actually cost? Many people are surprised at how affordable senior care really is, particularly when comparing the cost of living at home.
How does one pay for senior care? Despite common understanding, there are many ways to pay for senior living. Here are some popular methods:
- Income and savings
- Support from family members
- Long-term care insurance
- Veteran’s benefits
- Reverse mortgage and home equity
- Life insurance policies
Touring Senior Communities Checklist
Once you’ve identified what your needs are and settled into your financial decision, your Senior Living Advisor will suggest several choices in your desired location that meet your requirements. It’s time to start touring. With the helpful Senior Living Planning Guide you’ll know which questions to ask. We provide a working checklist as your tour facilities so you can observe and compare important features. For example:
- Safety features – How do they handle medical emergencies? Is there a visiting physician, or a doctor on staff?
- Legal and financial questions – Will you need renters insurance? Are there move-in incentives?
- General observations – Do staff call residents by name? Do residents appear engaged and happy?
Moving Into Senior Living
Making the decision is now much easier thanks to your Senior Living Advisor’s help, and the notes in yourSenior Living Planning Guide. Still, there is a transition period that your e-book can assist with, such as having a family conversation, supporting your aging loved one emotionally through this new journey, and what important documentation and keepsakes should be taken to your new home.
Don’t allow the emotional and logistical challenges of finding senior living overwhelm you. Use the Senior Living Planning Guide as your ultimate resource as you walk through the process of discovering your next home. The best decision you can make is a confident one once you’ve thoroughly researched all of your options. A Place for Mom is here to help you every step of the way. Download the e-book today and keep it with you as you work with your Senior Living Advisor to fine tune your search and find the perfect home.
Reprinted from A Place for Mom
In the past 2 weeks , the Maine Attorney general and Bureau of Consumer Protection, have issued warnings about these scams.
Callers pretend to represent the IRS. They claim they’re calling because taxes are past due: unless payment is made immediately, the caller threatens to file a lawsuit, seize property, even do them physical harm.
The fake IRS scams usually hit high gear around tax season but this year,however, crooks have been hitting the phone lines pretending to be IRS agents, police officers, court officials and others who might be in the business of collecting delinquent taxes.
Except they are criminals trying to get you to wire them money you can never get back.
As with most scams, the crooks demand that money be sent by wire transfer or prepaid cash cards. Both methods are untraceable and crooks count on that fact in addition to their scare tactics to make their scams work.
Aiding their schemes are electronic tactics, such as spoofing, which makes a phony number appear on caller ID devices. The criminals can make it appear they are calling from an IRS office, when they may be halfway around the world.
The callers can make their threats sound real, but they are as phony as the call itself. The real IRS never cold calls : they always send a letter first on real IRS stationary. They NEVER ask for credit or debit card information or that money be sent by wire transfer.
If you are in doubt, locate the phone number of the real tax office and call to find out if you have taxes that are overdue. Don’t disclose personal information–date of birth, Social Security numbers, credit or bank account numbers to unknown callers: you could become a victim of identity theft.
Report suspicious activity to the BCCP ( 800-332-8529), to an IRS office or to a federal law enforcement officer in Maine or Boston. The anti-scam guide Gone Phishing is available free to Maine residents who call the BCCP at the above phone number or online at CreditMaine.gov
|Physical fitness is one of the pillars of a healthy life, but that doesn’t mean you have to tie yourself to a regimented routine. Most experts recommend a half hour of walking as a good standard for daily exercise, plus other strengthening.
If you’re walking outside, make sure you’re wearing appropriate clothing and footwear, and you’re dressing in layers for the weather. Even more fun: walking with friends on a circuit inside the mall or even the local gym or school.
Don’t forget the many fitness programs available on TV, or from the library via tape. Many senior centers now have Wii consols and Wii fit, which is a fun way to track your progress.
There’s nothing that says you can’t put on a little bit of Chubby Checker and twist the night away, too! Dancing is a great form of exercise, and every bit of movement counts, from bowling to raking the lawn.
And don’t forget the usual advice: Check with your doctor before you begin a fitness program.
Reprinted from Maine Senior Guide.
Sound the Alarm: Fraud Hotline Shines Light on Scams Targeting Seniors
Our parents and grandparents worked hard their entire lives and saved for retirement. Unfortunately, there are criminals who are targeting them and who want to rob them of their hard-earned savings. Far too many older Americans are being financially exploited by strangers over the telephone and in the mail. Worse yet, they also may be targeted by family members or by people they trust. Many of these crimes, however, go unreported because the victim is too afraid or embarrassed to do so.
In early 2013, as Ranking Member of the Senate Aging Committee, I, along with then-Chairman Bill Nelson of Florida, made consumer protection and fraud prevention a primary focus of our Committees work. From the beginning, we held hearings examining telephone scams, tax-related identity theft, Social Security fraud, and the impact of payday loans on seniors, among other issues. In November of 2013, recognizing the epidemic of fraud perpetrated against seniors and the extent to which victims are often unsure of where they should turn for help, our Committee launched a toll-free Fraud Hotline at 1-855-303-9470.
Today, as Committee Chairman, I oversee the Fraud Hotline and remain committed to protecting older Americans against fraud and to bringing greater awareness to this growing problem. The Hotline has been successful in meeting both of those goals, responding to thousands of individuals over the telephone or through the online form on the Committee Website.
The Hotline allows the Committee to keep a detailed and current record of common fraud schemes impacting seniors. This record informs the efforts of the Committee, and ultimately the work of the U.S. Congress.
Just as important, the Hotline offers real help to victims and potential victims. The Hotline is consistently staffed during business hours with investigators who have experience with investment scams, identity theft, bogus sweepstakes and lottery schemes, Medicare and Social Security fraud and a variety of other scams of which seniors are often the victims. The Hotline seeks to assist individuals by providing callers with important information regarding steps that can be taken when a senior is the target of a scam, including where to report the fraud and ways to reduce the likelihood that the senior becomes a victim or repeat victim.
Seniors are typically referred by investigators to the local, state and/or federal law enforcement entities with jurisdiction over the particular scam. In addition to law enforcement, Committee staff may also direct seniors to other resources, such as consumer protection groups, legal aid clinics, Congressional caseworkers or local nonprofits that provide aid to seniors.
The range and frequency of scams reported to the Hotline demonstrate the extent of this epidemic. The highest number of complaints this year are about criminals posing as IRS agents who falsely accuse seniors of owing back taxes and penalties. Due to this extremely high call volume, I called for an Aging Committee Hearing in April to investigate and raise awareness about these scams. Last Congress, the Committee held a hearing to investigate a Jamaican Lottery Scam as a result of increased calls to the Fraud Hotline.
Another common scam is identity theft, in which thieves access personal information through numerous means, including stealing a wallet, purse, or mail; posing as a legitimate company and requesting information in a phone or email scam; sifting through the trash; gaining information provided to an unsecured Internet site; and obtaining credit reports by posing as a landlord or employer. The Federal Trade Commission reports that identity theft is the number one consumer complaint, with 20 percent of the complaints coming from victims age 60 and older.
Among the other top complaint generators are computer scams, in which fraudsters posing as tech support from a well-known technology company, gain control of the victims computer and the sensitive personal information it contains. Lottery and sweepstake scams, in which the victim is told he or she must make substantial advance payments of taxes or fees in order to claim winnings that do not exist, are also common.
A particularly alarming type of fraud is the grandparent scam. In these cases, scammers call a senior pretending to be a family member, often a grandchild, claiming to be in urgent need of money to cover medical care or a legal problem, such as for bail or legal services following a supposed arrest. This is a particularly cruel scam, as it combines financial loss with unwarranted worry over a loved one.
Two issues that have arisen repeatedly during the Committees investigations are the frequency with which victims do not report fraud and the difficulty they encounter in determining where they should turn for help. Fortunately, the Committees focus on increasing awareness of senior fraud is paying dividends.
Thanks to the cooperation of police departments and senior-oriented agencies in Maine in getting the word out, our state is leading the nation this year in Hotline usage. Our small state, with the nations oldest median age, is at the forefront in bringing attention to the serious problem of fraud against our seniors.
My monthly SeniorSource newsletter, which provides regular updates on a range of aging issues, includes an insert with anti-fraud tips and the Hotlines toll-free number (1-855-303-9470) than can be clipped out and placed near the telephone or on the refrigerator. To sign up for this informative newsletter, please email Senior_Source@collins.senate.