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Income Tax Tips
Special tax deductions for parents of children with disabilities or special health care needs
When it’s time to do your taxes, make sure you deduct all allowable medical expenses for your children. That includes health insurance premiums and any medical expenses not reimbursed by health insurance. (Editor’s note: Some of these deductions may be applicable for adults as well. Questions should be addressed by a tax professional or the IRS.) In order to take these deductions, you must itemize on Schedule A, form 1040 (the long form), and the expenses must exceed 7.5 percent of your adjusted gross income.
General medical expenses
Medical expenses include amounts paid for “the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purposes of affecting any structure or function of the body.” Typical expenses include medications, doctor visits, hospital stays, wheelchairs, or any other item that the doctor has “prescribed” as “medically necessary.” Specialized toys and computer equipment for children with disabilities can be deducted, as can television or telephone equipment for children with hearing impairments. Even the cost of diapers for an older child who is incontinent can be deducted.
Transportation costs related to medical care
You can deduct out-of-pocket expenses for your care, such as gas and oil, when you use your car for medical reasons like driving your child to medical appointments and therapies or to the hospital. Parking fees and tolls to medical appointments are also deductible. If you don’t want to use your actual expenses, you can use a standard rate of 10 cents per mile for use of your car for medical reasons. If your child requires medical care far from home, you may deduct up to $50 per person for lodging per night (or $100 for a child traveling with a parent). The cost of your meals, however, is not deductible.
Lead-based paint removal
The cost of removing lead-based paints from surfaces of your home to prevent a child who has or has had lead poisoning from eating the paint is a legitimate medical deduction. Surfaces must be in poor repair (peeling or cracking) or with in the child’s reach. But you can’t deduct the cost of repainting the scraped areas.
If your child with a disability attends a residential special school, you may deduct as a medical expense the cost of meals, lodging and tuition. A deduction is also allowed for the cost of hiring a special education tutor. Tuition costs for sending a child with behavior problems to a private school, however, are not allowable.
Capital improvements on your home
If your child is physically disabled, you may deduct the expenses incurred in making your house wheelchair-accessible, such as adding entrance and exit ramps and widening hallways. Modifications that increase the value of the home, such as an elevator or adding an additional room, are partially deductible. The deductible amount of the modification is the cost that exceeds the increase in the value of your home.
Keep track of your expenses
If requested by the IRS, you must be prepared to show receipts, bills, and other documentation of your expenses.
For more information
The IRS provides free tax services throughout the year. Publication 502, Medical and Dental Expenses offers a complete list of items that you can and cannot include in figuring your medical expense deduction. This can be viewed at the IRS Web site at http://www.irs.gov/prod/forms_pubs/pubs/p50207.htm. Or call the IRS at (800) 829-3676.