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Geriatric social worker

dascpa
Level 9

To deduct medical expenses  the expense must be for "medical care". We now have social workers who for people in assisted or memory care living create a "plan of care" that outlines specific daily services each resident receives.  This is tax deductible.

My question is a client lives at home. Has medical aides in which W-2's or 1099's are given. but there is a geriatric social worker who hires and oversees these people.  There is no written "plan of care".  Two other CPA's gave me opposite answers at to the tax deduction for this person.  One said administrative and not deductible, the other said absolutely it's considered medical.  As the cost is high I'd like your opinions.

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IRonMaN
Level 15

I'll split the difference and go with "maybe".  I would look at it as what kind of condition is the taxpayer in.  Some folks hire people to come in just to keep an eye on an elderly person and help with daily chores just so the family doesn't have to worry about them being by themselves.  Then you have other folks who need someone around because they tend to topple over easy or they need someone around to make sure they take their meds timely and help with other needs.

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
BobKamman
Level 15

Gotta love the AICPA -- they have a publication called "The Tax Adviser" that has a lengthy explanation of geriatric care managers, that will answer every question you have except whether their services are tax deductible.  

https://www.thetaxadviser.com/issues/2019/jun/geriatric-care-managers.html

Maybe because the answer is obvious?  Yes, social workers can be considered "licensed health care practitioners."   They are allowed to write the plans that make long-term care expenses qualify for a tax deduction.  

No question in my mind that this is deductible, but maybe I'm staring at the wrong part of the ceiling.  Where did that CPA come up with a disallowance for "administrative"?  When was the last time you broke out administrative costs from a doctor or hospital bill?  Does your health insurance bill "administrative" separately?

dascpa
Level 9

Great point but when an item is part of a "package" we don't break it out.  But when it is separate it may be.  I think the IRS might come down on the side of "is there a written plan of care".  But then again,. I've been wrong once or twice in my life.

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BobKamman
Level 15

Quite possible that IRS comes down on the side of "written plan of care."  That's why fees paid to the person who is allowed to write it, are deductible.  

I compare this to court costs and legal fees related to guardianship for an incapacitated person.  Those can be medical expenses.  Can't get much more "administrative" than that.