Tag Archives: Special Needs Planning

End Of Life Planning For Individuals Of Special Needs

End of life planning for an individual with special needs is always a difficult consideration. And yet, it is a common topic regarding financial planning for a person receiving Supplemental Security Income (SSI) or medical assistance. However, such planning creates an opportunity to ensure a person with special needs is adequately prepared in such a way that does not impact standing with SSI or Medicaid.

The federal government (and most states) highly encourage an end of life plan for those receiving SSI as part of their overall financial plan. There are many alternatives available to family planners, but in a situation such as this—where benefits can be jeopardized if the wrong product is used—an irrevocable burial trust is probably the best instrument to choose.  Continue reading "End Of Life Planning For Individuals Of Special Needs"

Risks of Rising Wages

Rising wages? That doesn’t necessarily sound like a bad idea. Rising wages means more money, and more money is a good thing. Usually.

In early 2014, the Obama Administration added a new change to its executive order that would raise minimum wage for employees under federal contracts to $10.10. At the urging of disability advocacy groups, President Barack Obama made sure to include workers with disabilities in this new chance. Although the promise has yet to be realized, papers have been signed and changes are already being made for employees who had previously received  a federal minimum wage of $7.25. Minimum wage has always been a controversial issue and the debate about its economic efficacy continues.

Continue reading "Risks of Rising Wages"

What a Special Needs Pooled Trust Does For You

Hands of a Child and ParentThe purpose of a special needs trust is to enhance or protect the quality of life of a person with a disability. Specifically, it does this by maximizing the resources available to them, without disqualifying him or her from eligibility for public benefits, including Supplementary Security Income (SSI) and Medicaid.

When estate planning, rather than leaving property directly to a loved one with a disability, it may be best to establish a special needs trust for that person and leave the property to the trust.

Continue reading "What a Special Needs Pooled Trust Does For You"

5 Tax Credits & Deductions For Special Needs Families

Parents of children with special needs often have unique financial concerns, and one way to ease those concerns is to reduce their tax burden.

There are many tax credits and deductions available that parents may not be aware of. Parents of children with special needs should familiarize themselves with the deductions and credits and take care to document all expenses related to their children’s medical expenses, development and therapy.

Here are 5 useful tax deductions and credits for parents of children with special needs.

1. Medical & Therapy Expenses

The first type of deduction to consider is for medical and therapy expenses. For income tax purposes, learning disabilities are a type of medical condition. This may include autism, ADHD, cerebral palsy, and other learning disabilities.

While these expenses are limited by 7.5 percent of adjusted gross income, the limitation may be exceeded by certain types of out-of-pocket expenses.

Such expenses can include the following:

  • Special schooling such as: tutoring that is specifically intended to address the special needs of the child.
  • Regular education when it is intended to treat the child’s special needs.
  • Aides that a child may require to benefit from education.
  • Exercise programs, if they are recommended by a medical professional.
  • Transportation to and from special schools or therapy sessions.
  • Equipment, devices and supplies necessary to treat or alleviate a medical condition, including technology items such as communication devices.

2. Specialized Foods

A gluten-free, casein-free diet can be used as a deduction provided it is medically recommended. Generally, only the additional cost of the specialized foods over and above what would be paid for similar items is deductible.

3. Legal Expenses

In some cases, legal expenses related to your child’s special needs may be deductible, for instance if you hire an attorney to help you prove that your child’s medical expenses are legitimate.

Tax Credits

Even more helpful than a tax deduction is a tax credit, which applies directly to the amount of tax you owe. The tax credits most helpful to parents of special needs children are the Child and Dependent Care Credit and the Earned Income Credit. In both cases, a credit that is normally only available for children may also be used for an older child with special needs.

4. Child and Dependent Care Credit

The Child and Dependent Care Credit may be applied when you pay someone to care for your dependent, and it provides a tax credit of up to $3,000 per dependent, to a maximum of $6,000 for all dependants.  Child-care, after-school programs and day camp qualify for the credit.

The credit is available for children under the age of 13, but the age limit does not apply to older children with special needs.

5. Earned Income Credit

The Earned Income Credit can also be useful for parents of children with special needs. The credit generally may be applied by families with a low to moderate income and children under the age of 19, or up to age 23 for full-time students. However, for adult children living with their parents, the age limit does not apply.

In Conclusion

Parents of children with special needs know that there are unique challenges involved, including financial hurdles. However, with careful planning you can make sure you do what is necessary to reduce your tax burden and protect your child’s interests.

Source:  http://www.friendshipcircle.org/blog/2012/10/10/5-tax-deductions-credits-for-special-needs-families/