HOW TO FUND HOME MODIFICATIONS FOR SENIORS AND PEOPLE WITH DISABILITIES IN NEW YORK? PART III

Hello, I hope that everyone is doing well after such stormy weekend here in NYC. As promised, today, we will be talking about tax benefits, reverse mortgages, and other sources of financing for home modifications.

Personal Income Tax

Home modifications can be claimed as a medical expense by anyone if the criteria put forth by the IRS are fulfilled. Under IRS publication 502 (2010), “Medical and Dental Expenses” an individual can claim any expenses incurred in the acquisition of special equipment of home improvements made to a residence; as long as, these have been deemed medically necessary by a physician. A medical expense claim can be filed if the special equipment is for yourself, your spouse, or a qualifying dependent. The IRS has a broad definition of what is considered a dependent. In order to deduct 100% of the expenses as a medical expense, the IRS requires that the property value not be increased by the installation of special equipment or improvements.  If the property value is found to have been increased due to the improvements, you will only be able to claim some of the expenses.

This is a list of some home improvements that may qualify as a medical expense:

  • Constructing entrance or exit ramps for your home
  • Widening doorways at entrances or exits to your home
  • Widening or otherwise modifying hallways and interior doorways
  • Installing railings, support bars, or other modifications to bathrooms
  • Lowering or modifying kitchen cabinets and equipment
  • Moving or modifying electrical outlets and fixtures
  • Installing porch lifts and other forms of lifts (but elevators generally add value to the house)
  • Modifying fire alarms, smoke detectors, and other warning systems
  • Modifying stairways
  • Adding handrails or grab bars anywhere (whether or not in bathrooms)
  • Modifying hardware on doors
  • Modifying areas in front of entrance and exit doorways
  • Leveling the ground to provide access to the residence

If you would like to obtain more detailed information, please click on the link below:

http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178943

Tax credit for the elderly or the disabled

Individuals aged 65 or older and retired with a permanent total or partial disability can claim this tax credit; as long as, they fulfill all other requirements put forth by the IRS on publication 524 (2010). Although, the tax credit is only $1,125.00, I think that every little bit counts. For more information about this tax credit, click on the link below

www.irs.gov/pub/irs-pdf/p524.pdf

New York State Property Taxes

The New York State School Tax Relief Program (STAR) Enhanced is a tax credit that benefits seniors 65 years or older who own and live in their primary residence. To qualify, the household income cannot exceed $79,050. The maximum tax benefit varies depending upon location, time, and the level of assessment performed by municipality.  It is also based upon the annual adjustment rate based upon inflation. Generally speaking, senior home owners can save hundreds of dollars in taxes. For more information, click on the link below:

http://www.orps.state.ny.us/star/star_savings.cfm

 

Reverse Equity Mortgage

Reverse mortgage is a financial vehicle that allows seniors to use home equity; in order to, cover living expenses or necessary projects such as home modifications. In order for a senior to be eligible for a reverse mortgage, he or she must have enough equity built into the house value.  They must also never have defaulted on a federal debt.  Reverse mortgages as opposed to regular mortgages, do not require a credit history check since the equity on the house is used as collateral.  Another important aspect of reverse mortgages is that they do not need to be repaid right away.  The amount of equity taken out on the house depends upon the client’s age, current interest rates, and the equity built on the house.  Last but not least, the only thing asked of the borrower is that they pay their taxes, insurance, and maintain their homes.  For more information, please click on link http://www.reversemortgage.org/

By

Miller Calberto, MS, OTR/L, CAPS
Senior partner
Adapting Spaces, LLC
mcalbertotr@adaptingspaces.com
1888-956-0077

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