Workman’s compensation for on-the-job injuries is non-taxable if it is to compensate the employee for medical care. But when a person also receives Social Security disability benefits, these benefits can increase the amount of Social Security subject to tax. This article will describe how this interaction occurs and its effect on the amount of taxable Social Security and increase in tax owed.
The code includes a number of benefits for individuals with disabilities, but you can’t take advantage of these benefits unless you know about them and understand how they might benefit you and your special circumstances. Many of the benefits also apply to the parents of children with disabilities. Here is a rundown:
ABLE Accounts – Under tax law, states can offer specially designed, tax-favored ABLE accounts to people with disabilities who became disabled before age 26.
Recognizing the special financial burdens faced by families raising children with disabilities, ABLE accounts are designed to enable people with disabilities, who became disabled before age 26, and their families to save for and pay for disability-related Read More
Taxpayers with disabilities may qualify for a number of tax credits and benefits. Parents of children with disabilities may also qualify. Listed below are several tax credits and other benefits that are available if you or someone else listed on your federal tax return is disabled.
1. Increased Standard Deduction – If a tax return filer and/or spouse are legally blind, they are entitled to a higher standard deduction on their tax return.
2. Exclusions from Gross Income – Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income are excluded from gross income. Read More
Over the years I have worked with many families with special needs kids. I am amazed at their strength and the resilience of their spirit. The term “Special Needs” now encompasses more than what it used to and rightly so. It is truly phenomenal that studies show that the number of children diagnosed with autism, Asperger’s syndrome and many other neurological disorders continue to skyrocket. A recent report by the Centers for Disease Control estimated the rate to be as high as 1 in 50.
We know how disruptive the lives of families with special needs dependents are, which is only compounded by the fact that the costs of providing care to the dependents are very high. To further complicate things, parents or care-givers are not aware of possible tax deductions that can help alleviate some of these costs and they unknowingly forgo tax Read More
Somewhat obscured by the Congress’ passing of the “Tax Increase Prevention Act of 2014,” better known as the tax extenders legislation, was another bill passed by Congress and expected to be signed by the President this week. The Achieving a Better Life Experience Act of 2014, establishes “ABLE” accounts for disabled persons. These accounts basically function similar to a Sec. 529 Qualified Tuition Plan (QTP).
Following the procedures for a QTP, ABLE accounts are established and maintained by the individual states. Persons residing in a state with no ABLE program may participate in a program maintained by a “contracting” state. An individual is limited to one account, and there can only be one beneficiary for each account. In order to qualify for an account, the individual must be entitled to benefits based on blindness or disability under the Social Read More
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