Mar 19, 2009
Smart Tax Prep for People with MS
Martha King
IRS Publication 907, Tax Highlights for Persons with Disabilities has important details for you or your tax preparer. It’s downloadable at www.irs.gov or telephone 1-800-829-3676.
- Gross Income: Supplemental Security Income (SSI) and certain veterans (VA) disability benefits are excluded from your gross income. However, Social Security Administration payments may be taxed, and income from disability insurance that was paid for by your employer (or former employer) is taxable. See IRS publication 525.
- Impairment-Related Work Expenses: If a physical or mental disability limits your ability to function as an employee, you may be able to deduct work expenses related to that impairment. Examples: wages for an on-the-job personal care attendant, or the cost of a text-to-speech computer program. See IRS publication 907 for details.
- Medical Deductibles: You may deduct your medical and dental expenses for the year to the extent that they exceed 7½% of your adjusted gross income, with a few exceptions. You may count the cost of home improvements or equipment to alleviate your physical or mental condition as medical expenses. Examples include installation of ramps or air conditioning, the amounts paid to purchase, train and maintain a service animal, and more. See IRS publication 502.
- Dependent Care Credit: If you pay someone to care for a dependent person so that you can work or look for work, you may claim a credit for those expenses. The dependent can be your spouse or another adult who lives with you, even if that person has some income, as long as he/she is physically or mentally unable to be left alone. See IRS publication 503.
- The Earned Income Credit (EIC): You may be due a cash payment if you worked in 2008 for a low annual wage — up to $12,590 for a single person with no dependents and up to $39,783 for a married couple, filing jointly, who have more than one dependent child. To get the check, you have to apply. See Publication 596.
- Credit for the Elderly and Disabled: Low-income individuals with taxable disability income may qualify for a tax credit. See Publication 524.
Start planning now. Get free help from the IRS at 1-800-829-1040. Call early, not on April 14!