Tax Deduction Tips for Parents of Children with Special Needs

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taxesThe IRS deadline for filing your 2010 taxes is April 18, 2011. Although 63 percent of Americans have filed their tax returns, nearly 64 million Americans are waiting until the last minute or filing tax extensions this week. For parents and caregivers of children with special needs, deducting every dollar possible is important to their already tight family budgets.

“As a parent of a special needs child and a CPA, I know there are special deductions parents can take,” said Carl Dobratz, CPA. Dobratz is the father of a 41-year-old developmentally disabled son and practicing California CPA.

Top Five Income Tax Deductions for Special Needs

Dobratz suggests parents track any expense that could be related to their child’s development, therapy or medical expenses. Transportation costs to and from doctor’s appointments and therapists are considered itemized deductions. This may include bus fare, taxi receipts and mileage. As a volunteer, parents donating their time to local nonprofit organizations such as Autism Speaks, Easter Seals, Community Gatepath or Family Resource Centers may deduct transportation costs related to these activities. Trip mileage to the park, museum or other special destinations may be considered tax deduction if authorized in a note from a health care professional. If these destinations are important to a child’s sensory awareness or social skills, it may not only be a day of fun, but a tax-deductable opportunity.

Equipment and items that are important towards the therapy of a child should be tracked and itemized. As long as the item is not something a child in general would use – car seat, baby crib, toys – than it is deductable. For example, a baby stroller may not be deducted, but if a child needs a wheelchair or additional assistance towards mobility and physical therapy, add it to the list.

New deductions for parents to consider include technology items. Tablets, ipads and applications used specifically towards a child’s communication, speech or cognitive development are deductable. These items are considered similar to medical devices that may be vital to a child’s therapy. Breast pumps are a new tax deduction item for new parents to include.

It’s recommended for caregivers to consult a certified account or tax service on these deductions as well as deductions from medical expenses, social security, family credits, charity donations, education and investments. Families should also research if they are eligible for the Earned Income Tax Credit which may save them thousands of dollars.

Local counties and select states offer free tax services for families meeting income criteria. IRS.gov provides a variety of free resources for families including recommendations on deductions.

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