Yes, it's here ... Tax Season! It's time for us Americans to do our duty and fill out all those forms. W-2, 1040, Schedule B ... ugh. Where do we go? How do we figure this out? Especially if we have special cases and/or we aren't familiar with tax laws? This article is intended to help with the challenges that we, as adults with bipolar disorder, face while staring at our tax forms - and hopefully it will give you a little smile during this stressful time ;)
Now just breathe. Deep breaths. I'm breathing, too! Remember, bipolar doesn't mean ignorant. (I believe we're a more intelligent people than normal, but ... that's a different article!) Okay, our mantra is: Bipolar doesn't mean ignorant! Let's do it!
First, organization is the key. I know, ugh! But trust Lily. It will help in the next steps. Clear off a space (that means cleaning is involved, ugh again!) and start gathering paperwork.
A complete listing of ALL types of income is here (http://www.irs.gov/publications/p17/pt02.html) so you can search for your particular situation. If you're still not sure whether your income qualifies as taxable after looking at this list, there is more help here (http://www.irs.gov/contact/index.html).
But I'm not finished! That takes care of the income part of the form. Next is the fun part. Fun? Oh yeah. If you own a home, you should have received a 1098 form by now. If not, call your mortgage company. Don't worry, they won't bite. This form is needed to complete your taxes. It shows interest you paid on the loan, so it is deducted just like medical expenses below. Be sure to find this form - it is why we own instead of renting!
Now breathe ... ahhh. Start gathering the receipts you've spent out-of-pocket for medical expenses. Sort them out so you can figure out you have all of them. Hint: I wasn't sure if I had all my pdoc bills, so I just asked them - at the pdoc's office - to double-check my records - saves time and worry. ONLY USE out-of-pocket dollars, which means you can use your co-pay if you have health insurance. If you don't have insurance, you can use everything. There is an entire list of medical and dental expenses here: http://www.irs.gov/publications/p502/ar02.html#d0e524. It is a long list but complete. Also, pharmacies will give you a list of all your prescriptions and their costs for the previous year.
Also, health insurance premiums can be used that you pay but - and this applies only if you are employed - they must not be paid with pre-tax dollars. Repeat: You cannot deduct health insurance premiums paid with pre-tax dollars. There are two ways to determine if you are paying premiums with pre-tax dollars. The first and best is to ask your employer. Second is to look at your pay stub. If the insurance premium is taken out of your pay just like the other taxes, then you can use it. My premium was added on my W-2 in box 14 - Other. If health insurance is listed as an Adjustment rather than a Withholding on your pay stub, it may have been taken as pre-tax - meaning you've already received the tax benefit for this money (so you're really not losing out on anything now!).
Time to stand up, breathe in and out slowly, and do the mantra: Bipolar, not ignorant! It works, yes, it works! Trust Lily!
While you're up, find a calculator, a pencil and a pen. Sit down with your receipts and all the rest of your paperwork. Add up all the medical receipts, insurance premiums, and anything else the IRS says we can deduct in medical/dental. Write that number down.
Find all of your income and add those together and write that number down. Subtract from that your deductions (student loan interest will be most likely but there are many other topics here). That will give you your adjusted gross income. The medical expenses MUST be at least 7.5% of your income to deduct it.
Whew. There's a lot of rules. But next there is something pretty exciting. Aw now, really, truly! Well, for those who have dependents - The Earned Income Credit! Ooooooh! Ahhhhh! This is just a reminder that the government actually gives parents a break ($2 to $2000)!!! Read the EIC document carefully - http://www.irs.gov/publications/p596/ar01.html#d0e19 - because they have severe penalties if the taxpayer is not eligible or disregards the rules.
Next: More Advice and Comments
