SCI & Taxes: Deductions, Tax Credits & More

If you have a spinal cord injury, tax season can get a wee bit complicated. From managing all of the expenses related to your injury to making sure you know about all of the tax credits that are applicable for your situation, there’s a lot to know.

But we are here to help. Whether you’re looking for information related to a specific disability-related question or you’d like to know the most important tax facts as someone with a spinal cord injury, the list below is for you.

And if you have any tax tips to add, please send them to spinalpedia@gmail.com and we’ll include it in the post below.

Don’t Forget: SSDI Is Taxed

If you receive SSDI each month, don’t forget – up to 50% of these benefits are taxable. This is only taxable however if you make over $25,000. For couples filing jointly, the amount is $32,000.

Also, if you’ve received a lump sum in SSDI benefits this year (from back payment etc), you do not have to pay all the taxes on this sum in one singular year. The IRS will let you to pay taxes on lump sum payments spread throughout future tax years.

Disability Tax Credits Abound

As you guessed, there are a ton of exciting tax credits that exist for people with disabilities. Here are some of the best:

– Earned Income Tax Credit (EITC):  If you made less than $13,460 last year, you’re eligible for this hefty tax credit, with a credit that can total up to $5,666. Even if you didn’t make enough money last year to file, you should still file; you could still be eligible for this tax credit. And if you worked last year, you can only file for this credit if you made between $13,460 and $48,362.

– Credit for the Disabled: Another great tax credit for people with disabilities is the Credit for the Disabled, which can award you up to $7,500. You can only be eligible for this tax credit however if you receive a taxable disability income from a former employer.

– Standard Deduction: If you’re legally blind, you can get the Standard Deduction which entitles you to a higher standard deduction on your tax return.

– Credit for the Elderly or Disabled: If you are under 65 and on permanent total disability, you can apply for this tax credit. Those who are over 65 are eligible for this tax credit as well.

– Child or Dependent Care Credit: And lastly, if your spouse helped pay for your care last year, they are eligible for this tax credit.

Injury and Medical-Related Deductions

Carefully adding deductions to your tax return that are related your injury is another way to really save some money on taxes. Here are a few of the most important deductions to know:

– If your medical costs exceed 7.5% of your adjusted gross income, you can deduct medical costs if they’re itemized. Deductible expenses include everything from medical and dental costs to travel expenses for treatments and medical insurance premiums.

– If you hired someone last year to fight on your behalf to help you get the SSDI benefits to deserve, you can deduct the finder’s fee from your tax return.

– Impairment related work expenses: If you’re disabled and have a job that can be affected by your disability, there are various deductions you are eligible for found under the moniker “Miscellaneous Donations” on your tax return.

This sums it about it. Now if think you might have trouble getting your taxes done on time this year, the IRS offers a volunteer program to assist those with disabilities.  It is called their Volunteer Income Tax Assistance System Program and you can learn more here.

Where do you like to file your taxes? And, did we forget any credits or deductions you couldn’t live without?

Helpful Videos on Disability & Taxes

– Veteran Tax Exemption – 100 disabled veteran benefits

– David Allen – Taxes and Social Security Disability Payments

– Can Disability Beneficieries File for Taxes? TurboTax Tax Tips Video

– aElderly or Disabled Tax Credit