Maximizing Your Income as a Caregiver
Being a caregiver for a loved one can be taxing, especially considering the time, attention, care, and money you have to put into it. Sometimes, we instinctively pay out of pocket for medical expenses or other caregiving-related costs when there are opportunities to have them reimbursed. In addition to tax deductions, there are also opportunities to leverage the use of an HSA (Health Savings Account), which helps reduce the taxable income you have each year.
Here are some ways of maximizing your income as a caregiver in Pennsylvania. Working with JEVS Care at Home provides you with an easy way to receive compensation as a caregiver. But, you have other methods include finding options in financial assistance programs, managing your taxes adequately, and budgeting with caregiving in mind.
Pennsylvania Caregiver Support Program
The Pennsylvania Caregiver Support Program from the Department of Aging helps caregivers of loved ones continue care with the program’s resources. Caregivers get assigned a care manager that will perform an in-home assessment of your loved one’s needs. Like most other requirements for caregivers, in this program, you must be 18 or older and must meet other eligibility requirements outlined here.
The program offers support in the form of resources and services. Services include benefits counseling, training, and care management. In addition, they offer reimbursement opportunities for recurring expenses such as assistive devices, respite care, and supportive services.
At JEVS Care at Home, you can expect the same level of training and benefits when you work with a client through us. We streamline the process to ensure you have the resources and support you need to take care of your client or loved one.
Veterans Affairs Family Caregivers Assistance Program
For the families of veterans, the VA offers an assistance program. Caregivers must be 18 years of age and veterans must have a VA disability rating of 70% or higher. In addition, the veteran’s disabilities must have been the result of or worsened by active duty. The VA website offers more information on eligibility.
Eligible caregivers can receive assistance in mental health counseling, education, training, and travel/lodging when traveling for care. In addition, the program offers respite care, health care benefits, and a monthly stipend for the caregiver.
When working with an agency like JEVS Care at Home, training, certifications, and benefits are standard practices. We strive to provide the best services, education, and support possible for our caregivers, and to ensure they have all the tools they need to succeed.
Tax Tips for Caregivers
There are various options for you as a caregiver to maximize your income through taxes. In general, we recommend you compile all of the documents related to your caregiving for your records. The available options can help save you money each year; below are some easy examples for you to use that help you save some extra money.
Save Receipts for All Caregiving Expenses
Saving receipts goes a long way when tax season approaches. Most medical expenses can be allowable deductions, so you should actively keep them for reimbursement. You can deduct copayments, medications, transportation, equipment, and other related expenses from your taxes. In addition, if the IRS audits you, these receipts serve as documentation for expenses incurred while caregiving.
Use Healthcare Spending Accounts
Using an HSA on qualified medical expenses benefits you if your loved one qualifies to be your dependent and if you have a high deductible health plan. You can pay into these accounts in order to pay health-related expenses. However, you then can’t deduct these expenses from your taxes. The contributions you make to these accounts are pre-tax, which means they reduce your taxable income. In addition, HSA withdrawals are tax-free, and your funds in the account grow tax-free as well.
Look Into IRS’ Rules on Dependents
It is possible to claim a dependent as a caregiver. The requirements for determining dependent eligibility include:
- The dependent must make less than 4,050 per year.
- They aren’t claimed by another as a dependent.
- They are a legal resident of the U.S.
- They must either be family or have lived with you for a year.
- Lastly, you, the caregiver, must be responsible for more than 50% of the dependent’s living expenses.
Deduce Medical Expenses
On your taxes, you have the opportunity to deduct the medical expenses of your dependent’s medical costs and if those expenses total more than 7.5% of your adjusted gross income and if your total itemized deductions are more than your standard deduction. These deductions cover expenses not covered by medicare and go a long way in reducing your tax bill.
Budgeting Tips for Family Caregivers
Create a Budget for You & Your Family Member
As a good rule of thumb, we recommend keeping close tabs on your monthly spending. According to research from AARP, family caregivers spend about 26% of their income on caregiving, which they estimate is about $7,000 a year. With expenses like that it’s in your best interest to budget. Keep track of expenses like: food, transportation, clothing, rent, and medical bills to start.
Plan for the Unexpected
Unfortunately for caregivers, slips, falls, and worsening medical conditions can happen at any time. While some expenses can be reimbursed, it’s still essential for you to have money saved to cover these expenses. In addition, planning for your own time away is important. Take into consideration the cost of adult day care expenses and respite care for when you need help.
Identify Potential Home Modifications
If your loved one already needs a caregiver, then ultimately you should make changes to their home to prevent the risk of future injuries. While they may not need the modifications today, in a year they may. Identifying and observing how your loved one ages is the first step to seeing potential opportunities for necessary home modifications. Railings, wheelchair ramps and stair lifts are all common modifications you should consider and expect to apply to the home.
How JEVS Helps Caregivers Maximize Their Income
At JEVS Care at Home, we strive to help relieve the outside stresses of being a caregiver for your loved one. Caregiving should be about your loved one, and with our services we believe it’s easier than ever to receive compensation for your work. Below are some of the ways JEVS makes it easier for caregivers to focus on care.
JEVS Caregivers Aren’t 1099 Workers
When you work with JEVS, you receive similar tax implications as you would in any other job. The positions we offer are not freelance or contractor positions, so taxes are automatically removed from your weekly paychecks. This is just another way for us to help you give the care your loved one needs without needing to jump through hoops.
JEVS Caregivers Receive Bi-Weekly Pay
We provide our caregivers with bi-weekly paychecks, so we recommend you consider budgeting accordingly. We clearly define your pay schedule, so use some of our tips in budgeting to make sure you make the most of every paycheck. In addition, we recommend adjusting the due dates of your bills, setting money aside when possible, and deduct your medical expenses when you can.