If you work with persons with disabilities or have a disability yourself, it is important to understand what income tax relief or benefits may be available. These benefits will affect the bottom line for a person with a disability and can make a real difference in their financial situation.
It begins with the availability of special assistance in preparing your taxes which may be obtained directly from the IRS or through the volunteer income tax assistance or counseling program sponsored by the IRS. In addition to the help with the tax return, the persons providing such special assistance will also be able to ensure that you receive the various deductions, credits and other benefits for those with disabilities. Alternatively, your financial adviser or planner should be able to help you get on the right track with these benefits.
Most of us may be familiar with the increased standard deduction available for the legally blind as well as the itemized deductions for medical expenses where such expenses are substantial. However, there are several other benefits which may be applicable and can help a person reduce any tax liability or perhaps receive a tax credit. For example, many types of disability payments or compensation are not included in your taxable income at all and if you are working, you may be able to deduct work expenses related to your disability.
Lower income persons retired with a disability may be entitled to a tax credit while persons who are still working albeit with a disability may be entitled to an earned income tax credit. Another option for working persons with a disability is the tax advantaged savings account – ABLE account – which allows for some savings while not affecting the eligibility to participate in applicable governmental assistance programs.
As you can see, although it may not be a great deal of money and may take some time and effort on your part, there can be a real benefit to you when you have a disability. Don’t overlook these benefits.