• People who provide care to an elderly family member or a disabled loved one may qualify for hefty deductions when tax time rolls around. To qualify for caregiver tax deductions, the person you provide care to must be a spouse, a dependent or a qualifying relative---parents, step-parents, in-laws or another person who lived with you for the entire tax year---though once qualifications are met, tax deductions may greatly reduce your bottom-line liability if managed properly.
  
  

Dependent Deduction

• If the person for whom you provide care isn't your child, you still may be able to claim him as a dependent. To qualify as your dependent, your patient must not be claimed by anyone else as a dependent. You must provide him with at least 50 percent of his financial support, and must not earn more than $3,600 during the year. Also, dependents who were unable to care for themselves, either physically or emotionally, who lived with you for more than six months may also be claimed as a dependent.
  
  

Medical Expense Deduction

• If the combined total of medical expenses for you and your dependent exceeds 7.5 percent of your gross adjusted income, the Internal Revenue Service allows you to deduct medical expenses. The range of items that qualify for this deduction is wide, and is defined by the IRS as any expense for an item needed to diagnose, treat or prevent illness. While doctor's care and prescriptions obviously qualify for these deductions, caregivers may also claim the costs of special foods, modifications to their home to make them handicapped accessible and the cost of any other supplies required because of your dependent's medical condition.
  
  

Additional Caregiver Deduction

• If you are unable to provide the level of care to your dependent that he needs and must contract in-home nurse care or must transfer your patient to long-term care, you may claim these additional deductions on top of the ones your caregiver status provides you.