Year-End Financial Checklist for Family Caregivers

If you’re caring for an aging parent or loved one, you’re likely helping your loved one with daily money matters. If that’s the case, there are several financial moves you might need to make before the end of the year for both your loved one and yourself.

Carve out some time over the coming weeks to tackle these tasks and mark them off your to-do list.

‍[ Find Out: What to Know About Being a Financial Caregiver ]

‍Review your loved one’s spending

Help your loved one review bank and credit card statements from the past year to see how much money came in from income sources versus how much went out in spending. Use this opportunity to help your loved one identify expenses that can be trimmed or cut to make sure your loved one’s money lasts. Then create a budget for 2024 to help your loved one keep spending in check. 

Make year-end payments

Review your loved one’s bank account statements from previous years and check the mail for bills that are due by the end of the year, such as property tax payments. Your loved one also might make annual payments for insurance policies. You don’t want to let any bills that are paid infrequently slip through the cracks.

‍[ Read: How Do I Keep Track of My Loved One’s Bills? ]

‍Review expenses you paid for your loved one

If you provided financial support for your loved one, add up the medical or living expenses you paid out of pocket. Your loved one might qualify as your dependent for tax purposes if your loved one’s gross annual income was less than $4,700 and you provided more than half of your loved one’s total support for the year. Then you may be able to claim the federal Credit for Other Dependents of up to $500 on your 2023 tax return. 

You also might be able to claim the dependent care credit (up to $3,000 for one person in 2023) if your loved one lived with you for more than half of the year and you paid someone to care for your loved one so you could work. There are other tax deductions you might qualify for, so contact a tax professional to such as an enrolled agent or certified public accountant to find out what tax benefits you can receive for the financial support you provided for your loved one.

[ See: Tax Breaks to Help Offset the Cost of Caring for Parents ]

Designate FSA contributions for 2024

If your employer offers a dependent flexible spending account, you may be able to contribute money to the account to help cover the cost of care for your loved one while you work. To qualify, your loved one must be your tax dependent, live with you for more than half of the year  and not be physically or mentally capable of caring for himself or herself. You can contribute up to $5,000 to a dependent care FSA in 2024, but you’ll need to designate how much to contribute before the end of this year.

You also may be able to use funds in a health care FSA or health savings account to pay for out-of-pocket medical expenses for your loved one if your loved one qualifies as your dependent. If so, you’ll need to decide before the end of this year how much to set aside for 2024.

Compile an annual financial report

If you’re a court-appointed conservator for your loved one, you’ll likely need to file an annual report with the court detailing how you managed your loved one’s finances over the past year. You’ll also need to file a report with the Social Security Administration to show how you managed your loved one’s Social Security benefits over the past year if you are your loved one’s representative payee. You’ll be mailed a Representative Payee Report if you have been appointed your loved one’s payee.

Even if you’re not your loved one’s conservator or representative payee, it’s a good idea to create a spreadsheet or financial report to share with siblings or other family members. This will allow family members to see that you’re managing your loved one’s finances responsibly.

Ensure your loved one takes required IRA distributions

If your loved one is at least 73 years old and has an IRA or similar retirement savings account,  she is required to withdraw a certain amount of money from that account annually. Otherwise, your loved one will have to pay a 50% tax on the amount that was supposed to be withdrawn but wasn’t. Charles Schwab has a free IRA RMD calculator you can use to determine what your loved one’s withdrawal should be.

Review your loved one’s investments

Help your loved one log onto his or her retirement savings account to review how the investments in the account have performed over the past year. As a result of market swings, some adjustments might need to be made to your loved one’s portfolio. 

Your loved one might need to schedule a meeting with his or her financial advisor or accountant to discuss what year-end adjustments need to be made. If your loved one doesn’t have an advisor, you can find one through Wealthramp, the Garrett Planning Network or the National Association of Personal Financial Advisors.

‍[ Read: How to Help Your Parent Hire a Financial Advisor ]

‍Help your loved one prepare for Medicare Advantage open enrollment

If your loved one is enrolled in a Medicare Advantage plan, he or she should have received an “Annual Notice of Change” from the plan provider by now. Take the time to review it to find out whether there will be changes in cost and coverage starting in January 2024. 

If the cost of the plan is going to rise significantly or if your loved one’s providers will no longer be part of the plan network, there will be an opportunity to switch to another Medicare Advantage plan or switch back to original Medicare from January 1 to March 31. You should be designated as your loved one’s power of attorney if you are the one who will be handling your loved one’s enrollment in a new plan. Also, you or your loved one will need to fill out the Medicare authorized representative form so that you can be appointed to act on your loved one’s behalf if your loved one is no longer able to manage Medicare benefits on her own.

Review medical spending

If your loved one had a lot of out-of-pocket medical costs this year, he might be able to deduct the amount of medical expenses that exceed 7.5% of his adjusted gross income if he itemizes on his tax return. Add up unreimbursed expenses (such as co-pays, deductibles, long-term care insurance premiums, long-term care costs and other costs not covered by Medicare) to see if your loved one has passed the threshold. 

If he is close, consider getting him treatments that have been put off or buying items he might need, such as prescription glasses, hearing aids or false teeth, before the end of the year. Or, if you can claim your loved one as a dependent, you might be able to write off medical expenses you paid for him this year. See IRS Topic 502 to learn more about medical expenses that can be deducted.

Sign up for account monitoring

Take advantage of technology to make it easier to stay on top of your loved one’s finances. You could sign up for a service such as Carefull, which you can link to your loved one’s bank, credit card and investment accounts. Carefull will monitor those accounts 24/7 for money mistakes and signs of fraud and send alerts by email when it spots something unusual.  

Carefull also will monitor your loved one’s credit and personal information for misuse. It provides up to $1 million in identity theft insurance to help repair the damage if your loved one becomes a victim of identity theft.

‍[ Keep Reading: 15 Government Benefits That Could Help Your Parents Save Money ]‍