IRS Announces That Face Masks and Related Purchases Are Tax Deductible — Lexington, KY

IRS Announces That Face Masks and Related Purchases Are Tax Deductible — Lexington, KY

The IRS has announced that the tax deduction for medical expenses includes amounts spent on face masks, sanitizer and other products purchased to prevent the spread of the coronavirus.  If you have significant medical expenses, you may be able to deduct them from your taxes. Many types of medical expenses are deductible, from long-term care to hospital stays to hearing aids. This year, the IRS has made clear that “medical expenses” also includes amounts paid for personal protective equipment, such as masks, hand sanitizer, and sanitizing wipes, as long as they were used for the primary purpose of preventing the spread of COVID-19.  However, this deduction will be irrelevant to most taxpayers. To claim the deduction, your medical expenses have to be more than 7.5 percent of your adjusted gross income and your other deductions have to be sufficient to justify itemizing rather than taking the standard deduction. This may be the case if you have large home care, nursing home or assisted living expenses (the latter only deductible if you’re there for medical reasons), in which case the cost of your face masks, etc., is going to be a drop in the bucket. In addition, you can only deduct medical expenses you paid during the year, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance. Due to the ongoing coronavirus pandemic, the deadline for filling 2020 taxes has been extended to May 17, 2021. For the IRS’s press release on deducting personal protective equipment, click here.   For more information on what you can and cannot deduct, see Publication 502 on the IRS Web site. If you have any additional questions or concerns about tax deductions, medical expenses, or other estate planning, call Melissa at Gayheart Law at (859) 276-6193...

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Finding the Right Hospital Bed Rental – Lexington, KY

Finding the Right Hospital Bed Rental – Lexington, KY

If you are caring for a loved one at home, you may need to rent a hospital bed. Here are the ins and outs of hospital bed rentals.  The benefit of a hospital bed is that it adjusts to allow people with limited mobility to more easily get in and out of the bed. The adjustable features include the raising and lowering the head and foot of the bed as well as changing the bed’s height. The beds usually have the option to add side rails to keep patients from falling out of bed. The following are the main types of hospital beds: Manual. A manual hospital bed is the cheapest type of bed. It adjusts with a hand crank, and requires a certain amount of physical strength to adjust. Semi-electric. A semi-electric hospital bed uses electric controls to adjust some components (for example, raising the bed’s head and foot) and a manual crank to adjust other components (for example, the height of the bed). Electric. A full electric hospital bed has all electric controls. The patient has the ability to control all the adjustable features with a remote control. Special beds. There are also beds that serve special purposes. A bariatric bed is a hospital bed that is specially designed to be sturdier and more comfortable for heavier patients. A low bed is set closer to the floor to prevent falling out of bed. A Trendelenburg bed provides even more adjustable features than a regular hospital bed, including the ability to stand straight up or turn into a chair.  Hospital beds can be rented from medical supply companies and usually cost $200 to $500 a month to rent. There are a variety of ways to pay for rentals, including:  Insurance. Most private insurance policies cover hospital bed rentals. You will need to check your insurance policy to see how much is covered and under what circumstances. You will likely need a doctor’s prescription in order to get coverage. Medicare. Medicare covers durable medical equipment, including hospital beds. Medicare will pay 80 percent of the cost of the bed rental. In order to get coverage, you must be enrolled in Medicare Part B, have a prescription from a Medicare-enrolled physician saying that the bed is medically necessary, and rent the bed from Medicare-enrolled medical equipment supplier. Medicare will cover hospital beds with variable height functions or electric functions only if deemed medically necessary.Veterans benefits. Health benefits from the Veterans Administration also cover medical equipment like hospital beds. Again, a doctor must prescribe the bed as medically necessary. Medicaid. If you are eligible for Medicaid home care services, Medicaid may pay for a hospital bed rental. Because Medicaid is a joint federal and state-run program, the rules vary depending on the state.  For any of your estate planning or related questions, call Gayheart Law at (859) 276-6193 or submit an appointment request...

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Medicaid Recipients Have a Little More Time to Spend Down Their Stimulus Money — Lexington, KY

Medicaid Recipients Have a Little More Time to Spend Down Their Stimulus Money — Lexington, KY

The one-year deadline for nursing home residents on Medicaid to spend down their first round of stimulus checks is here, but they may have a little extra time.  In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized $1,200 stimulus checks to most Americans, including Medicaid recipients. Another round of $600 checks was authorized in December 2020, and $1,400 checks were ordered in February 2021. The stimulus checks are not considered income for Medicaid recipients, and the payments have been excluded from Medicaid’s strict resource limits for 12 months.  While the one-year deadline for spending down the first round of checks is here, another COVID-19 bill gives beneficiaries more time. The Families First Coronavirus Response Act passed in March 2020 provides that if you were enrolled in Medicaid as of March 18, 2020, the state cannot terminate a recipient’s benefits even if there is a change in circumstances that would normally cause the benefits to be stopped. The law states that the recipient’s Medicaid coverage must continue through the end of the month in which the Secretary of Health and Human Services declares that the public health emergency has ended. The public health emergency is set to end April 20, 2021, but it will likely be extended.  While Medicaid recipients may have a little extra time, they shouldn’t delay too long in spending down the money if it has pushed them over the resource limit, which is $2,000 in most states. The following are examples of what a Medicaid recipient may be able to spend the money on without affecting their eligibility: Make a payment toward paying off debt.Make small repairs around the house. Update personal effects. Buy household goods or personal comfort items. Buy a new wardrobe, electronics, or furniture.Buy needed medical equipment, see a dentist or get eyes checked if those items aren’t covered by insurance. While Medicaid recipients usually cannot gift money or assets and remain eligible for benefits, recipients in at least some states should be able to make gifts from the stimulus money during the first 12 months following receipt. If you have questions about how you or a family member in a nursing home can spend the money, contact Melissa Gayheart at (859)...

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Why an Irrevocable Trust May Be Superior to Gifting — Lexington, KY

Why an Irrevocable Trust May Be Superior to Gifting — Lexington, KY

Parents and other family members who want to pass on assets during their lifetimes may be tempted to gift the assets.  Although setting up an irrevocable trust lacks the simplicity of giving a gift, it may be a better way to preserve assets for the future.  A trust is a legal entity under which one person — the “trustee” — holds legal title to property for the benefit of others — the “beneficiaries.” The trustee must follow the rules provided in the trust instrument. An “irrevocable” trust cannot be changed after it has been created. In most cases, this type of trust is drafted so that the income is payable to you (the person establishing the trust, called the “grantor”) for life, and the principal cannot be applied to benefit you or your spouse. At your death the principal is paid to your heirs. This way, the funds in the trust are protected and you can use the income for your living expenses.  While gifting assets outright is much simpler process than setting up a trust, the following are some of the advantages of setting up a trust instead: Income. Putting assets in a trust means you can receive income from the assets to continue to pay for living expenses. Depending on how the trust is set up, you can receive regular income payments or the trustee could have discretion to make payments. Control. With an irrevocable trust, you as the grantor can maintain some control over the assets. You get to choose the trustees and establish the rules of the trust. You can also retain the right to change beneficiaries with a power of appointment in your will.  Asset protection from creditors. If you give money to a family member directly, that money could be lost to the recipient’s carelessness, creditors, or divorce. Keeping the funds in a trust protects the assets for the future. Taxes. If the trust is structured properly, it can have a tax advantage for your beneficiaries. Assets that have gone up in value will receive a “step-up” in basis on your death, which means your beneficiaries will pay less in capital gains taxes. Assets that are gifted do not receive a “step-up.” Medicaid. If you anticipate needing long-term care benefits in the future, then it is important to plan ahead. If you give away money or fund an irrevocable trust within the five years (the “look-back period”) before applying for Medicaid, you may face a period of ineligibility for Medicaid benefits. The actual period of ineligibility will depend on the amount gifted or transferred to the trust. Putting assets in a trust allows you to plan ahead. For all your legal questions about trusts, taxes, Medicaid, and other financial worries, call Gayheart Law at 859-276-6193 or request a consultation...

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Biden Administration Eases Recommended Restrictions on Nursing Home Visits — Lexington, KY

Biden Administration Eases Recommended Restrictions on Nursing Home Visits — Lexington, KY

The Centers for Medicare and Medicaid Services (CMS) has issued new guidance on whether families can visit loved ones in nursing homes. The guidance allows indoor visitation even when the resident has not been vaccinated.  The coronavirus pandemic has hit long-term care facilities particularly hard, with more than 170,000 residents and employees dying of COVID-19. Most nursing homes have had at least some restrictions on visitors in place since the start of the pandemic in March 2020. Some nursing homes have banned all visitors, some allow visits by appointment only, and some restrict visitation to outdoors only. The absence of close contact with loved ones has been extremely difficult for both residents and their families over the past year.   Now that millions of vaccines have been administered to nursing home residents and staff, CMS has revised its guidance on nursing home visitation. The new non-binding guidance notes that outdoor visitation is preferred, even when both the resident and visitor are fully vaccinated. However, the guidance goes on to advise that indoor visitation should be allowed regardless of the visitor’s or resident’s vaccination status in most situations. CMS recommends limiting indoor visitation in the following circumstances: If the resident is unvaccinated and the county’s COVID-19 positivity rate is greater than 10 percent and less than 70 percent of the residents in the facility are fully vaccinated. The resident has a confirmed COVID-19 infection.The resident is in quarantine because of exposure to a person infected with COVID-19. CMS also states that while physically distancing should be maintained, a fully vaccinated resident may choose to have close contact with a masked visitor who performs good hand hygiene before and after.  If the nursing home has a resident or staff member who tests positive for COVID-19, the CMS guidance recommends that visitation be suspended until the entire facility has been tested. If the outbreak is contained, then visitation can continue, but if additional cases are found, then CMS recommends suspending visitation once again.  While the CMS provides recommendations, each state is free to make its own visitation rules.  To read the guidance, click here.  For resources on visiting long-term care facilities from The National Consumer Voice for Quality Long-Term Care, click here. For your legal questions and help with long-term financial planning, contact Gayheart Law at 859-276-6193 or request an appointment...

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