Tax Filing Help for the Disabled

by Anthony Radano

 

It’s that time of year again.  By now many of us have started to receive “Important Tax Information Enclosed” letters that give us the data needed to file our taxes.  If you are like me, the process of organizing financial materials and paying taxes is one of the most confusing tasks out there.  However, with a little education and access to the information and resources available, a disabled taxpayer can make this job a lot simpler.

There are several tax credits and benefits available to qualifying taxpayers with disabilities as well as to the parents of disabled children. Listed below are several tax credits and other benefits that may be available if you or someone listed on your federal tax return is disabled:

Earned Income Tax Credit (EITC) - The EITC is available to disabled taxpayers, as well as to the parents of a child with a disability. This tax credit that not only reduces a taxpayer’s tax liability, it may also result in a refund. Many working individuals with a disability, who have no qualifying children, but are older than 25 and younger than 65 may qualify for EITC. If a taxpayer’s child is disabled, the age limitation for the EITC is waived. The EITC has no effect on certain public benefits. Any refund you receive because of the EITC, will not be considered income when determining whether you are eligible for benefit programs such as Supplemental Security Income and Medicaid.

Medical Expenses - If you itemize your deductions using Form 1040, Schedule A, you may be able to deduct medical expenses.  See IRS Publication 502, Medical and Dental Expenses.

Credit for the Elderly or Disabled - This credit may be available to taxpayers who are age 65 or older, or who are younger than 65 and are retired on permanent and total disability.

Child or Dependent Care Credit - Taxpayers who pay someone to come to their home and care for their dependent or spouse may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.

Impairment-Related Work Expenses - Employees who have a physical or mental disability limiting their employment, may be able to claim business expenses in connection with their workplace. The expenses must be necessary for the taxpayer to work.

Impact on the Standard Deduction - Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.

Gross Income - Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income may be excluded from a taxpayer’s gross income.

For more information on tax credits and benefits available to disabled taxpayers, see Publication 3966, Living and Working with Disabilities and/or Publication 907, Tax Highlights for Persons with Disabilities.  These publications are available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

 

Wanting Face-to-Face Contact?

IRS Taxpayer Assistance Centers are your source for personal tax help when you believe your tax issue cannot be handled online or by phone.  If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone face-to-face, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative across the counter.

The VITA Program offers free tax help to low-to-moderate income (generally $51,000 and below) people who cannot prepare their own tax returns. Certified volunteers, sponsored by various organizations, receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located in community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. To locate the nearest VITA site, call 1-800-906-9887 or find a VITA site near you

 

FREE Online Filing

Free File is a fast, easy, and free way to prepare and e-file federal taxes online for eligible taxpayers.  The Free File program is a partnership between the Internal Revenue Service and Free File Alliance LLC, a group of private sector tax software companies.  You qualify if your adjusted gross income was $60,000 or less.  Free File offers the most commonly filed Federal tax forms and schedules and does all the math for you.  You can get your refund in as little as 10 days with Direct Deposit.  The program is also available in Spanish.

The AARP Foundation promotes http://www.myfreetaxes.com to offer free, individualized tax preparation for individuals who made less than $60,000 during the past year.

 

Taxes and Social Security Benefits

Some people who get Social Security have to pay taxes on their benefits. About one-third of current beneficiaries pay taxes on their benefits. No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

  • file a federal tax return as an "individual"
    • and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.
       
  • file a joint return, and you and your spouse have a combined income that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $44,000, up to 85 percent of your benefits may be taxable.
       
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

For more information about taxation of benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits or contact the Internal Revenue Service.

 

(Updated 2-19-15)

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