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Finding Money for the Work.

A Level Entry resource. Comes with the course, lives outside it, and gets updated when the rules change.

Which of the four numbers this page is about.

Module 3 asked for the money in four numbers. This page is about the third one.

Nothing on this page is money you can hand a contractor. Some of it arrives after the work, some a year after, and some not at all. The plan is built on the first two numbers minus the fourth. This page is about money which may help you afterwards.

Every line below carries a mark, because a wrong figure here costs somebody eligibility.

The deduction.

The IRS treats equipment installed in a home, and improvements to a home, as medical expenses when their main purpose is medical care for you, your spouse, or a dependent.Verified · IRS Publication 502 This is not a tax credit and it is not automatic. It is a deduction. You have to itemize, and medical expenses only count above a minimum amount set as a percentage of your income. For a lot of people that minimum wipes it out. For a person with a renovation and a surgery in the same year, it often does not.Directional

There is one twist which matters for this course. If an improvement raises the value of your house, only the cost above the increase counts. Say you spend twelve thousand on a bathroom, and an appraiser says the house is now worth five thousand more. Seven thousand is the medical expense. But the IRS publishes a list of improvements it treats as adding no value at all, and for those the whole cost counts:Verified · Publication 502

• Ramps at an entrance or exit.
• Widening doorways at entrances or exits.
• Widening or modifying hallways and interior doorways.
• Rails, support bars, and other modifications to bathrooms.
• Lowering or modifying kitchen cabinets and equipment.
• Moving or modifying electrical outlets and fixtures.
• Porch lifts and other lifts. An elevator is treated as adding value.
• Modifying fire alarms, smoke detectors, and similar equipment.
• Modifying stairways and hardware on doors.
• Grading the ground outside for access.

Operation and upkeep of any of it counts too, and the rules apply to improvements you pay for in a rented home.Verified · Publication 502

Compare the list with your cards. Most of it is the same list of things which are nearly free before a wall closes and expensive after. The tax code and this course agree on what matters.

The honest limit: extra cost for architectural or aesthetic reasons is excluded by name.Verified · Publication 502 The part which does the job is deductible. The finish you chose because it passed the Home Test is yours to pay for. Ask the contractor to split the invoice so both parts are visible, get a letter from a physician saying why the work is needed, and get an appraisal if the improvement might add value. Publication 502 is the document, and the worksheet for working out the value is inside it.

The accounts.

A health savings account or flexible spending account often covers the same objects and, with a letter of medical necessity, some of the same improvements, and it works without the income floor.Directional · plan rules vary The saving is roughly your top tax rate, often a quarter to a third, because you are spending your own money before tax, with no insurer involved.Directional If you have one of these accounts, it is usually the better route for objects, and sometimes for the improvements. Ask the plan administrator what they accept before you spend, not after.

Medicare.

Medicare does not cover home modifications, and it excludes bathroom safety items, rails, raised seats, bath seats and the like, by name as convenience items. Not with a letter, not with a diagnosis.Verified · Medicare DME rules Some Medicare Advantage plans carry a small bathroom or home-safety benefit, and the share of plans offering one has been shrinking. Do not plan on it.Directional

What Medicare does cover is a different list: some durable medical equipment with a prescription, when it is medically necessary and used in the home. A commode, a hospital bed, a patient lift, a walker, and others.Verified · Medicare DME rules If a line on your cards is equipment rather than a change to the house, ask the supplier whether it is covered before assuming it is not. For the house itself, plan on cash, the deduction, or the account.

Medicaid.

Some state Medicaid home and community based services waivers fund home modification, with caps which vary by state and by waiver.Directional · by state Many states have waiting lists, and the lists are long. Worth asking about. Not worth waiting for.

Veterans.

Three VA grants fund home changes for veterans with service-connected conditions, at widely different amounts and with narrow eligibility for the two large ones: the Specially Adapted Housing grant, the Special Home Adaptation grant, and the Home Improvements and Structural Alterations benefit.Verified · namesDirectional · amounts change yearly If you or the person this is for served in the military, ask the VA before doing anything else, because the amounts are large.

The state programs.

Every state and territory runs an assistive technology program, federally funded, which does four things: demonstrates equipment with somebody who knows it, lends it for a trial period, passes on equipment somebody no longer needs, and in some states finances it or gives it outright.Verified · AT Act programs It is the most underused resource in this whole area, and it answers the one question no catalog can: whether the thing works for you, before you own it. The directory is at at3center.net. This is what module 5's sixth question is about.

Local.

Area Agencies on Aging, independent living centers, and some utilities and municipalities run small modification grants and volunteer repair programs. Eligibility varies by age, income, and place.Directional · by place One phone call to the local agency tells you what exists where you are.

Before you rely on any of this.

Four calls, ticked when made. The ticks stay on this device.

• Check the date at the top of this page.
• Ask a tax preparer about the deduction, with the invoice split and the physician's letter in hand.
• Ask the state assistive technology program about the loan, before buying any object on the cards.
• Ask the VA, if there is any service history.
• Ask the local Area Agency on Aging or independent living center what exists where you are.

Then buy.

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