Well in excess of six million kids in the U.S. are categorized as requiring special care as they have special needs. In the six years starting from 2005 to 2010, the number of children affected by autism grew by over 70 percent.
There are various tax deductions for education but the one that is of utmost importance for many students with special needs falls under the medical-expense category. Even though children with disabilities have a legal right to access free public education, some families instead choose to use that money to cater for a number of additional therapies.
The IRS Publication 502, titled Medical and Dental Expenses, which is accessible from the IRS website, offers important advice for families under such predicament.
These families can use the medical-expense deductions provided by the government to assist in meeting the costs. Sadly, most parents/guardians and tax professionals ignore it.
According to the same IRS publication, tax rules will allow tax breaks for diagnosis and treatment that is aimed at alleviating or forestalling a physical or psychological illness. The tax breaks can also be used for other therapies such as physical, occupational, and dance therapy.
Supplemental therapies can include the expenses for a program recommended by a licensed healthcare professional. This may easily cater for costs for a specialized college certificate course offered for students with acute learning disabilities.
In case the therapy or education is up for a tax break, travel costs for the student will also be deductible. Both food and accommodation at the specialized school will also be deductible.
The IRS allowed a medical deduction of $5,000 to cater for the costs of customizing the house to suit the specific needs of the student, and additional deductions equivalent to what would have been charged for accommodation, for the simple reason that living out of campus was necessary for medical purposes.
It should be noted that medical expenses are usually deductible only over a minimum rate of about 7.5 percent of gross income. This will rise to 10 percent for those who are yet to pay alternative minimum tax. In 2013, legislation dictates that the contribution to the Financial Services Authority will reduce by 50 percent from the $5,000 it currently stands at. This means that families that have access to a flexible current account can use their money for similar expenses without a threshold.
When a family qualifies for this deduction, most other medical expenses, including birth control pills, contact lenses, and even insurance premiums, will also be deductible. Those who wish to qualify for substantial medical deductions for their special needs children may need tax counsel from experts.
One should however, ensure that the treatment regime recommended by the doctor or other licensed healthcare professional is paid for before it is actually administered. In such a scenario, one should carefully store all the records supporting the deduction. For example, canceled checks to travel mileage.
One should establish the medical requirement for the therapy or special education, noting that it must be clearly focused on treating the problem.