Are you helping a loved one with long-term care and wondering how to do it in the most tax-efficient way?

This week, we helped a client who's paying for her mother’s stay in an assisted living facility, and it raised a valuable financial planning opportunity that many families overlook.

When Care Costs Can Help You Save on Taxes

Because this client is covering substantial care costs, her itemized deductions are now unusually high. That opens the door to a smart strategy—using those deductions to help offset taxes from other accounts that carry embedded tax liabilities.

What’s that mean?

Let’s say Mom has an IRA or an investment account with built-in capital gains. If she withdraws from or liquidates those accounts, there’s going to be a tax bill eventually—either for her or her heirs.

But during a year when care-related deductions are high, we can help strategically pull from those taxable accounts, using the deductions to wipe out or significantly reduce the tax liability.

Two Wins, One Strategy

This approach does two things at once:

• It funds necessary care for a loved one
• It reduces or eliminates tax liabilities that would otherwise come due later

That’s what effective tax planning is all about—looking ahead and pairing current needs with long-term strategies.

What Should You Do?

If you’re helping a parent or family member pay for care, don’t just write checks from whatever account is handy. Instead, ask:

• Are there accounts with unrealized gains or deferred taxes?
• Will this year’s deductions be unusually high?
• Can we pair those to minimize taxes?

The right answer can save your family thousands in unnecessary tax bills.

Need Help?

We’re here to help you take advantage of opportunities like this, where financial decisions and tax strategies align.

If you want to be sure you're making the most tax-efficient choices for your family, give us a call. We’re happy to walk through the options.