It’s that time of year once again – tax season! Of course, the subject of taxes is usually one that most of us avoid thinking about because, frankly, it is not the most exciting subject in the world. But as parents and guardians of people with disabilities know, there are many nuances in U.S. tax law that provide significant tax relief for people with disabilities and those who care for them.
That’s why we put together this brief guide to help you get started navigating this year’s tax landscape. As always, we recommend speaking with a qualified tax professional who can help you determine the best course of action for you and your loved one.
Be familiar with IRS Publication 907
Yes, we’ve all probably seen publications like this from the Internal Revenue Service and they are usually intimidating documents which go into extreme (and sometimes confusing) detail.
In short, “Publication 907 (2020), Tax Highlights for Persons With Disabilities” is an annual publication produced by the IRS aimed to assist the disability community with preparing to file taxes. The publication covers everything from income, tax credits and deductions, as well as updated information regarding ABLE accounts.
Quick Tip: Deductions vs. Credits
Tax Deduction: Reduces your taxable income
Tax Credit: Directly reduces the taxes that you owe
Tax credits are generally better than deductions and there are significant tax credits available for people with disabilities and their families.
Contact your tax professional for details.
Your tax professional should be well-versed on the information published in Publication 907. Every situation is different, so you should reach out to your tax professional who can help you plan for your unique tax situation.
Get tax preparation help… for free!
If you do not currently work with a tax professional, there are numerous programs that will help you file your taxes for free. A great place to start to find free tax preparation for you or your loved one is the National Disability Institute, which provides many free resources for the disability community in the areas of taxes and financial planning.
No matter your circumstances, getting professional consultation about your unique tax situation is the most important step in getting the most out of the tax benefits that could be available for you and your loved one. Taxes can sometimes be confusing and filing them is often a daunting task but it could be well worth your while to explore the many tax benefits for which you may be eligible.