If you have a child with learning and attention issues, tax deductions may save you serious money. But they can also be confusing. Al La Rosa, a partner at the accounting firm WithumSmith+Brown in New York, answers some common questions parents have.
What has changed under the Affordable Care Act that affects how much I can deduct for expenses related to my child’s learning and attention issues?
You may be able to deduct some costs as medical expenses. But you now have to spend 10 percent of your adjusted gross income on medical expenses before you can start deducting them. That’s up from 7.5 percent in past years. That 10 percent includes the medical expenses for everyone in your household.
Besides the obvious, what might count as a medical expense?
Not all deductible medical expenses involve a trip to the doctor. But you may need a doctor’s recommendation to back up these deductions. Here are some possibilities you might not have thought of.
- Special schools and tutors: Education may be considered “treatment” for a child with learning and attention issues. Your child’s issues must be the main reason he’s getting the services. And the school or tutor must provide services that directly address his issues.
- Assistive technology and tools: This can include things used at home, like tablets and software. Even an inflatable pillow may count. For example, it could help a child with sensory processing issues sit and do homework.
- Evaluations: These may count—but only if done by a qualified medical provider. This might be a psychologist or a speech and language pathologist.
- Therapies: Unreimbursed expenses for occupational, speech and behavioral therapies may qualify. Even yoga and horseback riding may count if they help manage your child’s symptoms. Again, you’ll need a doctor’s sign-off.
- Travel: Maybe you drive to a specialized school, tutor, therapist or other treatment. If so, you may be able to deduct part of your car mileage and parking costs. You could also deduct airfare and some hotel costs if you need to travel with your child for testing, treatments or consultations.
- Disability-related seminars or conferences: For an event to qualify, a health-care provider has to recommend it. It also has to speak to your child’s specific issues. You may be able to deduct costs related to the event. Costs like transportation, materials and lodging may count.
What about legal expenses?
The bar is high here. But if you need legal counsel to get services, your costs may be eligible. For example, if you’re suing your district for services or working with a lawyer to help enforce an IEP, your costs may be deductible.
Do I need a special accountant to help me?
There’s no special kind of accountant who deals with deductions for learning and attention issues. Word of mouth is a great way to find someone who has worked with families like yours. Parents in our community may have recommendations.
But any good professional should be able to help you. The money she saves you may be worth what she charges.
If you use a storefront tax service, come prepared with suggestions and documentation. It’s possible you may know more about the options than a less-experienced tax preparer.
Will taking all these deductions flag me for an audit?
It may, depending on how much you’re deducting. But that shouldn’t stop you from claiming what you deserve. The key is to document, document, document.
Save receipts for everything. Note what they were for, and keep them organized and easy to access. The same goes for doctor approvals, school assessments and other papers that show why your costs were necessary.
These examples don’t cover all possible deductions. The best way to know what you can claim is to consult a qualified tax professional. You can ask her about these possibilities. And she may know of others that would work for you, like tax credits and dependency exemptions.
You might also want to learn more about long-term financial planning for your child. With the right guidance, you may be able to put a dent in your extra costs.