When filing your income taxes, keep the following options in mind:
 

• Earned Income Tax Credit. This credit reduces taxes for many low-income workers, and it may even give you a refund. You can claim this credit on Form 1040.
• Medical deduction.  If you file an itemized tax return, you can deduct medical expenses that exceed 7.5 percent of your adjusted gross income. Save all bills and receipts for medications, parking fees to visit the doctor, gas and so on. Ask the doctor to write prescriptions for items that you need. For example, medications, splints, wheelchairs, medical appliances, special clothing or mattresses can all be tax deductible-if prescribed. If your car is adapted for medical reasons or if you've bought a walker, scooter or wheelchair, those expenses also may be deductible. Likewise, if you modify your house because of medical necessity, the cost may be deductible. You may want to consider consolidating these deductible expenses into a single tax year (calendar year), if possible, to maximize the benefit of this deduction.
  
  
  

©2001. National Endowment for Financial Education. All rights reserved.

Note: Certain content areas in this material are current as of the publishing, but legislative and regulatory changes as well as new developments may date this material over time. This content is meant to provide general financial information; it is not meant to be a substitute for or to supersede specific professional or legal advice.