I am so sorry that your husband needs this care and for the impact it is having upon you. I am happy to read that there are resources to pay for the memory care. So thankfully, as you know, the State of Washington has no state income tax, which is one of the reasons you may have been taking the standard deduction in the past few years.
So the standard deduction for Tax Year 2023 is $27,700. If you are both age 65 or older then an additional $3,000 would be added to the standard deduction. ($1,500 for each of you over the age of 65). So the standard deduction could be as much as $30,700.
So medical expenses are one of the itemized deductions, and these expenses will be significant. The key is this: You can only deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). For example, if your AGI is $100,000, the first $7,750 of qualified expenses (7.5% of $50,000) don't count.
So lets do an example here. First let's assume AGI is $100,000. Let's assume that your taxes are $10,000, which would include real estate tax and sales tax; there is no mortgage interest, and there are charitable contributions of $5,000. So using the $30,700 standard deduction there would need to be at least $15,700 of medical expenses above the 7.5% of adjusted income. So to itemize deductions there would need to be at least $23,201 ($7,500 is not allowed).
Memory care is very expensive, so more then likely you will be itemizing deductions, but the impact is not dollar for dollar. I am very happy that the resources are there to pay for the Memory Care for your husband. My thoughts are with you as you go through this difficult transition.
All the best,
Marc T.
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