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Taxes may be a worry only once a year, but when you are uncertain of how your taxes even work. For those who qualify for disability, your taxes have a lot of important details you need to know.
No need to worry! We have all the little tax tips and tricks you need to get through your next season.
Today we have 5 need to know facts about disability and taxes, as well as some guides for how best to tackle your taxes in the future. Eager to learn? Read on below!
Disability Definitions and Tax Tips
For taxes, disability has an absolute definition. The definition is as follows.
You qualify as disabled if you have a physical or mental disability that limits your ability for employment. As well, physical or mental impairments that limit major aspects of your life on a substantial level.
The major aspects they refer to walking, speaking, learning, breathing, working, or manual tasks. Some disability examples are blindness and deafness.
Below are 5 quick tax tips for figuring how your disability factors into your taxes. For more in-depth tax tips, look towards specific tax programs like PayStubCreator.
Larger Standard Deduction
One of the basic aspects of filing taxes is your standard deduction. If you qualify as disabled under the legal terms above, you may have a larger standard deduction.
Catching this will have a direct effect on the amount of taxes you can get back as a tax return.
Impairment-Related Work Expenses
Many disabilities come with expenses. Any expenses that have a direct relationship with a disability that affects your work can apply as a work expense.
This applies to medical expenses and to small charges that relate to your disability, like coping supplies.
Remember to get down all your work expenses. They add up!
Disabled and Retired
There is a specific tax credit if you retire with a disability. This credit only applies if your income does not exceed $17,500 per year.
Some Disability Payments Are Not Taxable
There are a few disability-related items that you cannot include in your taxes. This means you do not need to include them in your tax return.
These items include, but aren’t limited to, Military service payments, public welfare funds, worker’s compensation, and compensatory damages for physical injury.
The ABLE Account
As of 2015, there is now a special tax-advantaged savings account available to disabled individuals and their families. This savings account is the ABLE account.
These specialized savings accounts allow a disabled individual to keep saving money without disabling any of their government aid.
In normal situations, large savings accounts can jeopardize government disability. Not with the ABLE account.
The ABLE account will be under one individual’s name but family and friends can contribute to it. They can contribute up to $14,000 to an ABLE account per year.
The Details You Need
Tax tips come in all shapes and sizes, and we hope our 5 tips have helped you figure out how your disability relates to your taxes next year.
For more information on any kind of information you can think of, look no further than us at Vents Magazine. Check out our other articles for all the fun!
Author: RJ Frometa
Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.
