Being a caregiver is overwhelming at the best of times, and the end of the year is no exception. From driving to doctor’s appointments, picking up prescriptions, cooking, and cleaning, to juggling holiday plans and more, it’s easy for important tasks to go unnoticed. However, as the year comes to an end, financial loose ends are the most important to get right. Once the clock strikes midnight on 12/31, a lot of these doors close.

In this article, we’ll outline a checklist of 8 year-end financial tasks for caregivers – a simple checklist you can use to help keep your loved one’s finances in order and set them up for success in the coming year. Let’s dive in.

1. Review Yearly Spending

Reviewing your loved one’s spending for the year can help you see how much income they received/have available versus how much they spent. Go through bank and credit card statements to identify spending patterns. 

This task sounds tedious, but it can highlight any areas where they may be overspending or reveal places where expenses can be trimmed. By tracking these details, you can help create a budget that will stretch their resources and prevent overspending in the future. Use this as an opportunity to discuss mindful spending habits and set realistic financial goals for the coming year.

2. Make Year-End Payments

Now is the time to check if there are any outstanding year-end payments for your loved one. These may include: 

• Property taxes

• Insurance premiums

• Or other infrequent bills that may be due soon. 

Confirm all payments are in good standing so that you and your loved one can enter the new year with peace of mind, knowing that no essential bills have been missed.

3. Review Your Out-of-Pocket Expenses

If you’ve covered medical or living expenses for your loved one throughout the year, take time to add up these costs – it may make a big difference in your tax/deductible picture. 

If their annual income was less than $4,700 and you provided more than half of their support, they may qualify as your dependent for tax purposes. (Dependents | Internal Revenue Service)  This could make you eligible for tax benefits, such as the Credit for Other Dependents, which offers up to $500 on your tax return.

Consider consulting a tax professional to determine if you qualify for additional credits, like the dependent care credit, which can help offset caregiving costs.

4. Designate FSA Contributions for 2024

If your employer offers a Dependent Care Flexible Spending Account (FSA), you may be able to contribute funds that will help cover the cost of care for your loved one. (Source)

To qualify, your loved one must live with you for more than half the year and be your tax dependent, unable to care for themselves. You can contribute up to $5,000 per year (unless you are married and file separately – see full eligibility details here), but remember to designate the amount before the end of this year to include it for 2024.Note: Talk to a tax professional to determine your eligibility. If eligible, you must complete and attach Form 2441, Child and Dependent Care Expenses to your tax return. 

5. Prepare a Financial Report if You’re a Court-Appointed Conservator

If you’re a court-appointed conservator, you’ll likely need to prepare an annual financial report outlining how you managed your loved one’s finances over the past year. (Source: SO NOW YOU ARE A CONSERVATOR). 

The exact required reports and where they should be filed vary on a case-by-case basis, but you can expect to owe some sort of record before the year ends. Your attorney or tax professional may be able to provide details. 

Note: As a conservator, a lot of faith has been placed in your hands with the expectation that you’ll act in the best interest of your loved one. So even if you’re not legally required to file a report, consider creating a summary of their financial situation for your own records, or to share with other family members, as it can foster transparency and ease any concerns.

6. Ensure Required IRA Distributions Are Taken

If your loved one is 73 or older and has an IRA or retirement account, they’re required to take a minimum distribution each year. Failing to do so could lead to a penalty on the amount they should have withdrawn. (Source: ​​Retirement plan and IRA required minimum distributions FAQs | Internal Revenue Service) 

Use an online RMD (required minimum distribution) calculator to determine the correct amount to withdraw, and ensure this is done by the end of the year to avoid unnecessary fines or penalties.

7. Review Investments and Consider Adjustments

Year-end is a great time to review how your loved one’s investments have performed and consider any adjustments. Market fluctuations may have affected their portfolio, so it might be wise to consult a financial advisor to ensure that the investments align with their financial goals and needs. Adjustments may help maintain or enhance the stability of their finances.

8. Review Medical Spending for Tax Deductions

If your loved one had substantial out-of-pocket medical expenses this year, they may qualify for a deduction if those expenses exceed 7.5% of their adjusted gross income. (Source: Publication 502 (2023), Medical and Dental Expenses | Internal Revenue Service). 

Add up unreimbursed medical costs, like co-pays, deductibles, and long-term care, to see if they qualify. If your loved one is close to meeting the threshold, consider covering any medical needs, like new prescription glasses or hearing aids, before the year ends and consult with a tax professional to ensure the math is correct.

Closing Thoughts: Year-End Financial and Legal Checklists for Caregivers

The end of the year is the perfect time to get all of your ducks in a row for the upcoming one. Future you will be grateful for this initial legwork when it comes time to file taxes or review records down the line. This checklist should give you a good base to start from, though it’s always a good idea to speak with tax and/or legal professionals to verify your responsibilities and best practices before the year comes to a close.

The Caregiver Resource Center of Orange County is here to provide assistance and guidance to help you in any way we can. Check out our library of resources if you need more information about providing care to a loved one. Together, we can navigate the healthcare landscape and help you provide the best possible care for your loved one(s).

Further Reading: Caregiver Guilt – Balancing Family Expectations About Providing Care vs. Asking for Help

As our loved ones age or a disease progresses, caring for them can mean taking on increasing levels of stress and responsibility. The demands can easily grow beyond what you can reasonably handle, yet you may feel expected to continue.

When is it ok to say no? In this article, we’ll touch on these family dynamics and expectations as they relate to providing care and help you understand when it’s the right time to ask for help. 

Click here to learn more about balancing the expectations you, your family, your culture, or society at large have for your role as a family caregiver.