Tax Q&A/ Your Money

March 26, 2006

Baltimoresun.com's tax advice column features three experts from the Hunt Valley accounting firm SC&H Group answering questions about preparing your return. Here is an edited excerpt of this week's column:

Filing a head-of- household return for a mother in [an] assisted-living facility, what may I deduct other than medical expenses, medical premiums, prescriptions, prescription premiums, administering medicine by staff and annual charge by facility for her room?

- Nancy, Baltimore

Additional deductions include expenses for dentists, eye doctors and physical therapists. Medical aids such as wheelchairs, hearing aids and eyeglasses are also deductible. Keep in mind that if the main reason for being in the facility is to obtain medical care, then all of the facility costs are deductible. If medical care is not the main reason, then only the portion of the facility costs related to medical treatment is deductible.

A two-part question: First, my wife is co-president of a nonprofit organization for stay-at-home parents. She is not paid. Can she write off expenses such as for printing up fliers, travel to/from meetings, paying for meals, etc.? If so, where on my taxes?

Second, I'm a writer and recently traveled to London as part vacation, part research for a book I'm writing. What aspects of my vacation, if any, can I deduct, and where on my taxes?

- E.J., Columbia

You need to determine the nonprofit organization's charitable status. If it qualifies as a charitable organization, you may deduct the expenses and travel (14 cents per mile) as a charitable contribution on Schedule A, Itemized Deductions. If the organization does not qualify as a charitable organization, you cannot deduct the expenses.

If we assume that you are a self-employed writer in a business with the requisite profit motive, the expenses that are ordinary and necessary for your book research may be deductible on Schedule C, Profit or Loss from Business. If the main purpose of the trip was vacation, only business-related costs incurred during the trip would be deductible.

If the main purpose for the trip was business, you can deduct the costs of going to and from London, and business-related expenses incurred during the trip. Nonbusiness side trips would be nondeductible. Expenses for nonemployees accompanying you on the trip would generally be nondeductible.

My mother was declared legally blind. Somebody told me that she is able to make a deduction on her taxes due to this disability. Is this correct?

- Donna, Wilmington, Del.

Yes, that is correct. Taxpayers who are age 65 or older or who are blind receive an additional standard deduction amount that is added to the basic standard deduction amount (for 2005, the basic standard deduction is $10,000 for married filing joint taxpayers and $5,000 for single taxpayers). The additional standard deduction due to age or blindness is $1,000 for married filing joint taxpayers and $1,250 for unmarried individuals.

Two additional standard deduction amounts are allowed to an individual who is both over 65 and blind.

A taxpayer claiming an additional deduction for blindness must obtain a certified statement from a doctor or registered optometrist. The statement, which should be kept with the taxpayer's records, must state that:

The individual cannot see better than 20/200 in the better eye with glasses or contact lenses, or

The individual's field of vision is 20 degrees or less.

Keep track of any medical expenses related to her condition, as many extra or incremental costs associated with blindness may qualify as medical deductions. Finally, Maryland provides similar additional deductions to blind taxpayers, as well as a subtraction from income related to expenses of hiring a reader.

Can you still electronically file a [Form] 1040 if you have to send in additional documents such as the form required for the charitable donation of a car?

- Barbara, Catonsville

You can electronically file (e-file) your return when certain attachments are required. You will not, however, be able to use the paperless e-file option.

You will need to complete Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file return, and attach your Form 1098-C for the charitable donation of a motor vehicle. This form with attachments will be mailed into the IRS service center to complete your electronic filing.

To submit a question or read the columns online, go to www.baltimoresun.com/taxtalk.

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