The data from Centers for Disease Control and Prevention says it all, about 53 million Americans live life with disabilities. According to this 2015 data, these comprise both working and non-working people of the disabled population. People with disabilities and caregivers linked with them suffer from higher expenses due to greater medical care. The present tax regime makes a few of these expenses deductible. About one in five Americans suffer from disabilities.
Special tax strategies
It is apparent that disabled people need special tax strategies. Caregivers also come under this ambit of saving money. The easiest way to conserve your wealth is to open your ABLE Account. These are a new savings option for people who becomes disabled or blind prior to 26 years of age. These accounts have a similar function to the college savings account. Money deposited in such accounts grows free of any tax. The money could then be spent on what is needed with no tax implications.
Deductions and disability credit
You can also go for higher standard deduction. Most of these credits or deductions compel you to itemize. However, if you opt for the standard deduction, you can qualify for a much higher deduction. This is applicable in case your spouse is blind. You can also go for credit if you pay to get day care or any other care for a dependent while you search for work. The child and dependent care credit will reduce the tax liability. The amount can be as much as $3,000 for every dependent or to a maximum of $6,000 for all the dependents. Although this is applicable to children below 13 years of age, it can also be applied to individuals over 13 years, but they must have special needs. This particular credit can also be used to provide money for any adult day care applicable for a spouse. This can also be available for any other dependent who is mentally or physically incapable of self-care. Do know that you must itemize the deductions if you want to claim the credit.
You can go for the disability credit. To have this, you must already be a recipient of regular disability income. You must also be retired on total and permanent disability and be 65 years of age or older. Only if you fulfill such criteria, then you can qualify for Credit for Elderly or Disabled on your own tax return.