FAQs about tax deductions and kids with learning disabilities

If your child has learning and thinking differences, tax deductions may save you some money. But they can also be confusing. It’s best to consult a tax professional to discuss your situation.

Here are answers to common questions.

Can I take tax deductions for expenses related to my child’s learning and thinking differences?

You may be able to deduct some costs as itemized “medical expenses.” But you can only deduct unreimbursed, out-of-pocket medical expenses that exceed 7.5 percent of your adjusted gross income. You can add up all the medical expenses for everyone in your household.

Before itemizing medical expenses, check the IRS “standard deduction.” Your itemized deductions, including medical expenses, might be less than the standard deduction. In that case, you may not want to itemize.

What might count as a medical expense?

Not all deductible medical expenses involve a trip to the doctor. But you may need a written doctor’s recommendation explaining why something is medically necessary. 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 thinking differences. Your child’s challenges must be the main reason for getting the services. And the school or tutor must provide services that directly address your child’s challenges.

• assistive technology: This can include things used at home, like digital tablets and software. Even an inflatable pillow may count. It could help a child with sensory processing challenges sit and do homework.

• Evaluations: These may count. But they must be 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 may count if it helps manage your child’s symptoms. Again, you’ll need a doctor’s sign-off.

• Travel: Maybe you drive to a special 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 directly relate to your child’s specific challenges. You may be able to deduct costs related to the event, like transportation and lodging.

What about legal expenses?

Generally, personal legal fees are not tax-deductible. But if you needed to hire a lawyer to authorize or get medical treatment for your child, the fees may be deductible as a medical expense.

Do I need a special accountant?

There’s no special kind of accountant who deals with deductions for learning and thinking differences. Any good professional should be able to help you. The money they save you may be worth what they charge.

If you use a storefront tax service, come prepared with suggestions and documentation. 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 everything.

Save all of your receipts. Note what they were for, and keep them organized and easy to access. The same goes for doctor approvals, school and medical assessments, and other papers. They should show why your costs were medically necessary and related to an identified disability.

Are there other ways to save on taxes?

It depends on your family’s circumstances. One tax break to know about is the Child and Dependent Care Credit. This can reduce your taxes if you pay for childcare so that you can work. There are age limits to this credit. But an exception can sometimes be made for a child with a disability, no matter how old the child is. 

You may also want to think about a 529 plan. They offer tax-free withdrawals when used to pay for qualified education expenses.

Another plan to consider is an ABLE account. These are tax-advantaged savings accounts that can fund disability expenses.

Health Savings Accounts and Flexible Spending Accounts can also provide tax savings. These plans are sometimes part of employer benefits packages.

The best way to know what you can claim is to talk to a qualified tax professional. They may know of other tax credits or exemptions.

You might also want to read about long-term financial planning for your child. With the right guidance, you may be able to put a dent in your extra costs.