People generally try to include as many deductions as possible in their tax return forms so that they have to pay as less as possible. If you have a family member with special needs, you are already paying a lot to take care of them. The good news is that you can include most of these expenses as deductions in your tax return forms and pay much less.
TAX TIPS FOR FAMILIES WITH SPECIAL NEEDS
Many people write off certain items thinking that these cannot be included as expenditures, but there are a number of medical-related items that can classify as deductions. Thus, it is important that families with special needs are aware of what all items can be included as deductions in their tax return forms. There are also several other tax credits and deductions that can reduce your tax burden. These are as follows:
Medical and Therapy Costs
The Internal Revenue Service classifies learning disabilities like autism, cerebral palsy etc as medical conditions. The expenses you incur to treat these conditions can be included in your tax return forms as deductions, as long as it exceeds 7.5% of your annual income.
You can include also other medical expenses in your tax forms like any tutoring costs for children with special needs. If the regular school ahs special programs for special children and you have to pay extra for this, you can include it as a deduction.
Other items that count as deductions include exercise programs recommended by doctors, transportation and any equipment used to treat medical conditions.
Special Diet
If the doctor recommends a gluten-free diet for your family member with special needs, then it can be counted as a deduction in the tax forms. Any other food items that are specifically recommended by doctors for that condition can be included. But, only the extra amount that you pay for such items, as compared to normal foods is deductible.
Legal Costs
Any legal matters pertaining to your family member with special needs can be included as a deduction like if you hire a legal assistant to prove your medical costs.
Tax Credits
Tax credits reduce your tax amount directly and ensure that you pay much less taxes. For families with special needs, there are two types of special tax credits, which can reduce your tax burden to a great extent.
Child and Dependent Care credit
The first kind of tax credit you may be liable for is the Child and Dependent Care credit. Under this credit, any after school programs, childcare expenses and day camps that are meant especially for children with special needs is included. Generally, you get a tax relief of up to $3,000 for a single dependent and the maximum amount you can get for all dependents is $6,000.
Earned income tax credit
The second kind of tax credit that can help your tax woes is the Earned income tax credit. This is a tax relief for families with low to moderate incomes and is applicable to children and adults with disabilities.
There are also some tax cuts for people with special needs who are 65 years and older. Also, if you were receiving income from a previous employer’s benefit plan, you can get a certain tax cut which depends on the income level.
You should go to the website of the Internal Revenue Service to see what all credits and deductions you are eligible for, so that you do not miss out anything and end up paying more than required. You can also hire a tax preparer to help you out with the same or use a tax software.
Any family with special needs can now reduce their tax amounts by including certain medical costs and items as well as transportation costs. Even a special diet and legal expenses are liable as deductions in your tax return forms.
There are also several tax cuts in the form of credits, that can help reduce your tax burden to a large extent. Try to itemize all your deductions, include all credits and file all your tax returns on time to ensure that you do not lose out on any tax benefits.
Remember the Internal Revenue Service will charge you heavy penalties if you delay your tax return forms or if you do not report the correct details. Make sure you note down all the correct details, in order to avoid paying extra taxes in the form of late fees and penalties.
Stephen Elmore
