Tax Credits & Deductions for the Individual
Allocating funds towards making your business, home and/or vehicle more accessible for people with disabilities is beneficial and can boost your income in return. Be aware of the tax credits available to recoup the costs. The Federal Government and many individual states offer tax incentives to those making accessibility modifications on their homes, businesses, etc.
Here are some tips on getting the returns you are entitled to
- Medical Expenses– Deduct the amount of eligible medical and dental expenses that is more than 7.5 percent of your adjusted gross income (AGI). As part of your medical expenses, you can include the amount paid for special equipment installed in a home if their main purpose was medical care for you, your spouse or a dependent.
- Costs incurred to implement accessibility modifications in your home are an eligible medical deduction on your Federal Income Tax under “Medical and Dental Expenses”. If the value of your property is not increased by the improvement, the entire cost is included as a medical expense, some of these include widening doorways, entrances and hallways, installing railings and support bars, and modifying fire alarms and smoke detectors. More information can be found at https://www.nolo.com/legal-encyclopedia/deducting-medical-home-improvements.html
- Improvements to property rented by a person with a disability are also an eligible medical expense. Amounts paid by a renter to buy and install special plumbing fixtures in a rented house for a person with a disability are medical expenses.
- Expenses for modifications to vehicles can be included in calculations of medical expenses for deduction. You may include the cost of hand controls and other equipment installed in a car for the use of a person with a disability and the difference between the cost of a regular vehicle and a wheelchair accessible vehicle. Find more information outlining the tax code for medical equipment from the Internal Revenue Service or by calling 800-829-1040
Other Tax Benefit
- Social Security Disability Insurance– up to 50 percent of SSDI benefits are taxable each year (certain credits are refundable, meaning you can get money back even if you owe no taxes).
- Lump-sum SSDI benefits – because it can take years to receive disability benefits, most people initially receive a lump-sum amount, which includes back payments.
- Tax Credits for People with Disabilities
- Earned Income Tax Credit (up to $5,666)
- Credit for the Disabled (up to $7,500)
- Dependent Care Credit – up to 35 percent
For more info: https://www.prweb.com/releases/SSDI/taxes/prweb8144531.htm
The costs of living with a disability can become an exhausting expense. The more money you save, the easier it will be to maintain a higher quality of life. Consult a local tax professional for any further questions.
Be sure to check back for Part II of this blog that outlines the tax incentives for businesses who participate in accessibility modifications.
The National Mobility Equipment Dealers Association (NMEDA) is an advocate for mobility and accessibility for drivers with disabilities. If you need help with converting or buying a handicap accessible car, truck or van, please consider one of our mobility equipment dealers