Tax Tip of the Week | No. 325 | Tax Breaks for People with Disabilities

Tax Tip of the Week | October 21, 2015 | No. 325 | Tax Breaks for People with Disabilities

Have you heard about the new "Achieve a Better Life Experience" (ABLE) accounts? They're tax ­favored savings accounts you can establish to set aside money to pay expenses for a disabled family member. Assets in ABLE accounts grow tax-free and withdrawals are nontaxable if used to pay qualified disability expenses.ABLE accounts were authorized under a federal tax law, and individual states are responsible for setting up the programs. That means you may have to wait a while longer to open an account. However, the tax code currently offers other benefits for people with disabilities that may help reduce your federal income tax bill.For example, when you're legally blind, you can claim an enhanced standard deduction in addition to the basic amount. If you itemize, you can deduct medical expenses related to your disability, including the care and maintenance of a guide dog as well as certain home improvements such as access ramps. Other itemizeddeductions to keep track of: out-of-pocket expenses you incur so you can work.If you're the parent or spouse of a disabled family member and you pay for care of your loved one so you can work, you may be able to claim the child and dependent care credit. The credit directly reduces the federal income tax you owe.Contact our office for more detailed information about these tax breaks.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.