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 itemized deductions 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.
Give us a call for more detailed information about these tax breaks.
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