I wish could deduct those twenties I hand to off-the-books caretakers every week because my 16-year-old son can’t get off the school bus and be home alone for two hours. I also wanted to post this piece three or four months ago as everyone sweated over 1040s. Most days I was too busy, though, earning the money to pay the self-employment taxes on the extra money I earned to pay the taxes.
The National Association of Tax Professionals notes, “Because having a family member with special needs can be costly, it is particularly important that these families take advantage of all the tax deductions and credits to which they are entitled. Unfortunately, many taxpayers who qualify for these tax breaks are unaware and fail to claim them.” Maybe because he’s scurrying on a 90-degree day to find Alex only Utz Extra Dark Special pretzels or only Weaver chicken nuggets. God knows we all deserve some kind of break.
Here’s a roundup of tax deductions designed to help special needs families. Take a few on your next tax return and watch friends and neighbors with typically developing kids call you “lucky.”
Nutritional supplements are deductible when recommended by a doctor for treatment of a specific medical condition only. (What does the IRS have against The Vitamin Shoppe?) Special diets (such as a gluten- or casein-free) are partially deductible. Alex’s diet fits none of these conditions but I still figure Utz Extra Dark, $2.99 a bag ($2.49 on sale), say 2.5 bags a week times 52 weeks lops $300.70 off the top of my tax bill. I’ll eat the cost of both Alex’s Chips Ahoy! and most of the Chips Ahoy! themselves.
See a diet-deduction worksheet at http://www.tacanow.org/wp-content/uploads/2012/10/GFCFSF-Foods-Tax-Deduction-Worksheet.pdf . Attach a letter from your doctor to your tax return, the letter stating that your child suffers from a medical condition that requires a special diet.
Special schooling, including tuition or tutoring by a specialist to meet your child’s needs. Primary reason for the school must be to alleviate or remediate the disability.
Medical expenses exceeding a set percentage of your adjusted gross income (AGI). The IRS proclaims that medical care expenses “must be primarily to alleviate or prevent a physical or mental defect or illness.” I don’t make many medical deductions; for autism, there is no cure. It does seem that for tax purposes a sprained thumb is worth more money than a lifetime of watching Elmo and rocking on my couch.
For 2012 and prior years, medical expenses for most taxpayers were limited to the amount in excess of 7.5% of AGI; Obamacare bumps that limitation to 10%. Real change or a sop? Who cares?
Medical aids such as ramps or roll-in showers are fully deductible as medical expenses. Expenses that are merely beneficial to general health, such as vitamins or vacations, are not. I see the sense in that vacation one and yet, for special needs families, I sure don’t.
Car expenses for medical transport or medical trips. Actual gas and oil expenses, or use the medical mileage rate set by the IRS every year. (See https://www.familychildcaretaxes.com/tax_tips_article.php?blRecordNumber=93.) You can add parking fees and tolls to the total but not insurance, repairs and depreciation to the car. Your personal depreciation is your problem.
Lodging for medical trips but only under certain circumstances and not to exceed $50 per night per person, including someone traveling with the person receiving the medical care. Meals are not deductible. Seems about right. They say the Dow will hit 20,000 by 2016.
Equipment or devices used primarily for alleviation of a person’s illness, such as special bedding or car seats. Does a new iPad count?
Distributions from a qualified retirement plan or individual retirement account before you turn 59½ and used for medical expenses that exceed 10% of your AGI do not incur the normal 10% penalty.
Home improvements to the extent they exceed any increase in the home’s fair market value. Certain improvements (such as altering the location of or otherwise modifying electrical outlets and fixtures) are deemed to have no affect (sic) on the home’s fair market value and thus, the full cost can be claimed as a medical expense. Don’t understand this but I suspect, as with much of our tax code, I’ll never see a penny from it.
Other items such as medical insurance premiums, diapers, lab fees, specialized medical equipment in the home, medicines, costs of professional services and advance payments for lifetime care of special needs dependents.
Impairment-related work expenses. Employees with a physical or mental disability that limits employment or one or more major life activity may be able to claim impairment-related work expenses on IRS Form 2106 (http://www.irs.gov/pub/irs-pdf/f2106.pdf) or 2106-EZ.
Parents’ attendance at a disability conference. Here you may meet a lot of people who know better than to call you “lucky” for these deductions but your food and lodging are generally not deductible.
Sounds about right. They say the S&P will hit 2600 in six years. Alex will be 22.