Tax Losses (Deductions)

Although the majority of tax losses attributable to blindness result from lost productivity in the workforce, blind individuals are also eligible for an increased standard deduction on their federal income taxes. In 2010, the additional standard deduction for blind adults filing as a head of household was $1,400, while dependents were eligible for an additional $1,100.[39] Given that the median household income for persons who are blind is $23,294 based on Survey of Income and Program Participation (SIPP) data, we assume that these deductions would be taxed at the 15% marginal rate specified by the Internal Revenue Service if unclaimed.[4, 39] We also assume that all blind adults who are employed will file as a head of household and claim the additional $1,400 standard deduction and that all blind individuals younger than age 18 will not have sufficient income to claim the $1,100 standard deduction for dependents. Based on SIPP data, the labor force participation rate for working age blind individuals was approximately 26.2% in 2005. Using these estimates, we project that the use of this deduction by blind persons reduces federal tax revenue by $27.6 million annually (Table 11.5).

Table 11.5. Tax Losses Resulting from Deductions for Blind Individuals

Tax Losses Resulting from Deductions for Blind Individuals