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People taking care of an elderly family member might be eligible for tax deductions they are not even aware of, from hearing aids, walkers and dentures to the cost of transporting an elder to the doctor. Furthermore, if they pay over half of the elder's expenses for food, housing and medical supplies, the caregiver might be able to claim the elder as a dependent, a deduction worth thousands of dollars. However, caregivers often don't know the tax laws and short-change themselves come tax time.

According to AgingCare.com, caregivers should be aware of the following potential tax deductions:

• Medical Expenses. Nearly 100 medical costs can be deducted, related to the diagnosis, treatment, cure or prevention of disease or costs for treating any part of the body. Those include equipment, services and supplies, ranging from glasses to eye surgery to acupuncture to prescriptions.
• Long-term health care costs. An often-missed expense is the amount paid for long-term care services and long-term care insurance (that's a more limited deduction, depending on age). Rehabilitation, therapeutic, preventative and personal care services are among those that qualify as long-term care services, if your family member is chronically ill and if it's part of a plan set by a health care practitioner. Someone is considered chronically ill if they can't perform at least two activities of daily living (such as eating, toileting, bathing and dressing) without substantial assistance from someone else.
• Mileage. From weekly doctor's appointments to out-of-town visits with a specialist or for a procedure, the miles you log for your parents' medical needs can be deducted. You can qualify for this deduction if your parent is considered a dependent. You can take 19 cents a mile for 2011, for medical mileage. If you're staying overnight for a medical purpose, deduct $50 per night, for each person, for lodging.
• Home improvements for aging adults. Investing in ramps for a wheelchair-bound parent, handrails and grab bars in the bathroom or a stepless shower can be part of a deduction. It doesn't matter if the improvements are in your home or your parent’s home, as long as it doesn't add value to the house. According to the IRS, the cost of the improvement is reduced by the increase in your property value. Other changes, such as widening doorways and hallways, lowering kitchen cabinets and installing lifts, also typically do not add value to houses.
• Mortgage interest. If you are paying interest on your or your parents' home loans, construction loans or home equity lines of credit, it's deductible. There are some limitations, though, so you need to discuss with your accountant.
• Estate tax on an inherited IRA. This is not as easy as deducting medical expenses or charitable contributions, but it is worth checking out. If you inherited an IRA from your parents, you could take a deduction for the federal estate tax paid on IRA income.