Knowledge truly is power. In the case of taxes, knowledge is also a money saver.

It is not prudent to think that you don't have to file a tax return because your life may be shortened. At least one person survives every illness. Even if you die, your estate will still owe the money. Interest and penalties can add up to a great deal more than the original tax owed. 

Each of the following areas are particularly relevant to people living after a diagnosis of a serious health condition. Information about each subject is contained in the linked article.

Medical deductions

• Note that deductible medical expenses include expenses incurred for yourself, your spouse, children and any other dependent.
• Medical expenses are amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part of function of the body, where the expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Medical expenses include items you may not think of such as the cost of transportation to and from a doctor's appointment, your share of premiums you pay for insurance that covers the expenses of medical care, and home health aide to the extent he or she does nursing type duties.
• If you borrow money to pay for your medical expenses, interest is not deductible because it is considered to be interest on a personal loan. Interest on other loans which are considered to be personal includes interest on credit cards or loans against the cash value in a life insurance policy. NOTE:  The amount payable as interest is deductible, subject to a limit based in most cases on the total amount of the loan. If the exact amount is of interest to you, see IRS Publication 936. (At www.irs.gov , enter "Publication 936" in the search box. The deduction is applicable whether it is a first or second mortgage, and whether the money is used for medical or other personal expenses or to purchase the home. Points paid during the closing of a mortgage are also deductible.

Charitable contributions

• Giving to a disease specific charitable organization helps you as well other people with a similar condition
• Consider going through your home and look for items that you no longer want or need but that are still usable. You can donate them and get a tax deduction (which means additional money in your pocket). Some items, such as clothing and children's items, may be of use to hospitals or your local community service organization.

Work expenses

• Expenses incurred at your workplace to allow you to do your job are fully deductible. Such expenses are not considered to be medical expenses and are therefore not subject to the 7.5% medical expense threshold.
• Rules concerning deductible expenses if you work at home are not as strict as they used to be. Reasonable estimates are permitted to divide house related expenses between work and personal.
  

Taxability of Social Security benefits

Taxability of a sale of a life insurance policy either as a Viatical Settlement or a Senior (Life) Settlement.

Locating assistance for preparing a tax return

What to do if you owe back taxes

How to deal with an audit, including using your health condition when you need understanding from the IRS (yes, the IRS really is composed of people just like us).

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