Tax Breaks and Belly Laughs: How an ABLE Account Helps US Keep Our Sanity (and Our Savings)

An ABLE account (Achieving a Better Life Experience) is a tax-advantaged savings account for individuals with disabilities, allowing families to save for disability-related expenses without affecting eligibility for public benefits. You can learn more and compare options in your state through the National Resource Center for ABLE Accounts.

The other day I shared a few creative ways to keep up with the never-ending expenses of raising Noah. Now, buckle up, because I have another trick up my CPA-sleeved arm. Disclaimer: This is not tax advice. Yes, I am a CPA. No, income taxes are not my specialty. But parenting a child with a disability? I am a seasoned pro. And when it comes to tax perks for parents like us, I have done my homework.

Let us talk ABLE accounts. According to my research, about 46 states offer them. If you have a child with a disability, any disability, this is something worth exploring. These magical little accounts allow anyone to contribute. That includes you, your spouse, Grandma, your neighbor, or even your dog walker (bless their heart).

There are yearly limits, of course, but currently, my husband and I are the main contributors to Noah's account. Why? Because Maryland lets us deduct those contributions from our state income taxes. (Be sure to check the Maryland tax rules for exact thresholds, or look into your own state if you have the misfortune of living elsewhere.)

My philosophy? Every little bit helps. Especially when that little bit can turn into a deduction.

Here is the clever part: If we have an expense for Noah that qualifies say, therapy, summer camp, or anything approved under ABLE guidelines, we first contribute the amount to his ABLE account. Then we use that money to pay the expense. That way, we still pay what we were going to pay, but now it comes with a tax deduction bow on top.

Take this summer, for example. I signed Noah up for a few weeks of a special needs summer camp. I knew the payment was coming, so I first popped that money into his ABLE account. Later, I used those funds to cover the camp cost. It took a couple of extra steps, yes, but it also shaved something off our tax bill. And if there is one thing I like more than saving money, it is saving money legally.

So if you are in the trenches like we are, dealing with the chaos and costs of raising a child with special needs, take a look at an ABLE account. You might find it is not just able, it is downright helpful.

Have you used an ABLE account or found other ways to ease financial stress? Share your tips in the comments, or just let me know if this was helpful. I would love to hear what works for your family!

Source: ABLE National Resource Center