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Special Needs Deduction Categories
Special Needs Funding
Special needs funding and assistance is available courtesy of the IRS, but you need to understand how to best take advantage. Many therapies, treatments and purchases that you make are not covered by insurance. You may find that you pay these costs yourself.
Your special needs funding can go much further if you take full advantage of the tax code. A healthcare flexible spending account provides three main advantages over deducting these expenses on form 1040 schedule A:
- First dollar tax savings - no AGI limit to overcome
- FICA tax savings - pre tax dollars help you avoid this tax and saves you money 5 other ways
- Expanded deduction categories - see below for further details
A healthcare flexible spending account allows a variety of additional deductions for a child with special needs that are not typically available to other taxpayers.
Flexible Spending Accounts Any growing family that includes a child with special needs can benefit greatly over time by learning how to take full advantage of a flexible spending account. Your child may generate an ongoing stream of predictable expenses for child care and health issues.
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Special Needs Funding - Lower Developmental Counseling Costs
Developmental services are often not covered by medical insurance for children. Pay for these services using pre-tax dollars whenever you can.
- Early intervention programs
- Occupational therapy
- Recreational therapy
- Speech therapy
- Physical therapy
- Behavioral therapy
- Patterning exercises
- Sensory integration
Special Needs Assistance - Cut Education Costs
You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders.
You
can include in medical expenses the cost (tuition, meals, and lodging)
of attending a school that furnishes special education to help a child
to overcome learning disabilities. A doctor must recommend that the
child attend the school. Overcoming the learning disabilities must be a
principal reason for attending the school, and any ordinary education
received must be incidental to the special education provided.
Funding for Special Needs - Adaptive Customizations
Adaptive Customizationsare not typically deductible, however if your doctor provides a written note you can pay certain expenses through your Healthcare FSA. Examples include, but not limited to:
- Adaptive Equipment
- Adaptive seating
- Mobility devices
- Adaptive computer equipment
- Alternative communication device
- Adaptive Home Customizations
- Ramps
- Expanded doorways
- Handrails
- Elevators and lifts
- Adaptive Automotive Customizations
- Hand controls
- Wheelchair lift
Assistance for Special Needs - Experimental Treatments
Most major medical plans exclude coverage for what is deemed experimental treatments or alternative therapies. For example, many treatments for Autistic children fall into this category, meaning parents must pay the entire amount. Get a doctors note explaining the medical reason for the treatments, and pay using an FSA to generate tax savings, and reduce your costs.
- Nutritional supplements
- Hyperbolic oxygen therapy
