All of us face conditions of sickness at some point of our lives. Accidents, bad health and sometimes disability come our way however, you can plan for these unforeseen situations of life by taking comprehensive insurance cover. Under these cover you’d be entitled for considerable payment. Moreover, the insurance covers help you in getting tax relief as well. This way, you are investing your money in long term plan as well as getting rebate on tax.
On some of the insurance policies, you can also claim deductions on some of the medical expenses, if your expenses cross a certain amount. However, before filing any claim for deductions, you should check whether expenses qualify for tax relief and itemization. For disabilities also, IRS provides tax relief. An individual falls in the category of disability if he has mental, physical, intellectual or sensory weakness or facing a chronic ailment.
Most of the elderly people are more vulnerable to diseases and they have live away from their families. IRS has various provisions to provide tax relief to the elderly people. If you’re more than 65 years of age and living on your own then you’d get relief in paying tax from IRS. In order to get tax relief, you should get knowledge about the facilities provided by IRS especially for elderly people. If you qualify to get tax relief, you’d need to fill an application and send it to the Department of Finance Collections Division.
In case, the owner of the house is over the age of 65, permanently disabled and the income is not more than $18,000 per annum the homeowner has a flexibility to choose from fifty percent of the value of the property or $20,000 as tax relief. However, there are some requirements and formalities to get this benefit. Therefore, complete information on elderly tax relief is very essential. If you’ve not filed any tax return, you can represent documents related to taxable earnings and remember, you’d need to attach SSA 1099 form along with your documents. If you’re over 65 years in age or having permanent disability, you can get Homestead Credit however, the amount will totally depend on the income of the unit. If you’re disable and payment received from your employer, then it comes under the category of wages and salaries hence, taxable.
Besides sickness and disability, tax relief is also available for parents whether they are staying together or separately. The amount of the relief will depend on the income of the parents. As a parent, you can claim the child tax credit for kids under the age of 17. If your kids are college going students and you’re paying their tuition fee then you can save tax money on this amount. Lifetime learning credits are also there that can bring down your taxable income. These credits for all students that are dependent on you or you’re paying tuition fees for them. You can also get a deduction on the interest of student loan amount even if you’ve not itemized it.