How to Claim Disability Tax Deductions

May 7th 2016

Discuss your options for receiving tax deductions or tax credits with your tax professional or an accountant. Many of these figures depend on how much money you make after adjustments to your gross income for a tax year.

Standard Deduction

Citizens who are blind may take a higher standard deduction on their income tax return. That means the amount of income that goes towards your total income tax rate goes down. For the 2014 tax year, the standard deduction for a single taxpayer was $6,200. For a blind person or for someone born before Jan. 2, 1950, the standard deduction increases to $7,750.

Itemized Deductions

If you itemize deductions using Form 1040, Schedule A, you may deduct medical expenses related to your disability. Capital improvements made to your house, such as wheelchair ramps or stair lifts, serve as deductions if the expenses cost more than the increased value of your home. Medical expenses related to special car attachments such as wheelchair lifts also count as an itemized deduction. You may also deduct expenses related to a dependent's care. Taking the itemized deductions works if you have more deductions throughout a year than your standard deduction.

Tax Credit

Taxpayers may take the Credit for the Elderly or the Disabled if you meet certain criteria. You must be 65 or older by the end of the tax year. Disability requirements include a retirement on permanent disability, receiving of disability income in a tax year and retiring before mandatory retirement age. A total and permanent disability means you cannot engage in substantial activities related to full-time or part-time work because of your physical or mental condition. A physician must certify you as totally and permanently disabled, and this condition must last at least 12 months.

You cannot receive this tax credit if your adjusted gross income is more than $17,500, or your nontaxable income reaches more than $5,000, for a taxpayer filing single. The maximum amount of the credit is $5,000 before limitations lower the figure.

Nontaxable Income

Income you receive because of your disability does not count towards your taxable income. Veterans disability compensation and pension payments made to veterans or their families are not taxed. However, disability pension payments from employers do become part of your taxable income, as do any lump sum payments accrued from vacation, leave or sick days made as a salary payment.

Conclusion

American taxpayers who have a disability can claim certain tax deductions, income exclusions and tax credits depending on the type of disability, the age of the person and other criteria. These tax advantages occur when a taxpayer files his income taxes during the first part of every year. Find out what benefits a person with disabilities may get from the Internal Revenue Service with this basic guide.

Sources

IRS.gov "Exemptions, standard deduction, and filing information" http://www.irs.gov/pub/irs-pdf/p501.pdf
IRS.gov "Medical and dental expenses" http://www.irs.gov/pub/irs-pdf/p502.pdf
IRS.gov "Credit for the elderly or the disabled" http://www.irs.gov/pub/irs-pdf/p524.pdf
IRS.gov "Taxable and nontaxable income" http://www.irs.gov/publications/p525/ar02.html

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