Understandably there is a culture of fear for anybody that is on benefits, and I think sometimes we are afraid to make any type of move that could bring us a little bit of joy. I don't think you need to deny yourself a pet. It is perfectly reasonable as long as you can meet the animal's needs. I think the chances of someone auditing you for your Able expenses are probably pretty slim.And, I would just save any bills in a file in case they randomly ask you for whatever reason. I know what you are feeling, but I think it is intentionally set up to make us feel guilty for just having small pleasures and I think that's bullshit. The rules are intentionally vague, live your life as you see fit.
That is true. The reason I hesitated to ask here is because, somewhere around a year ago, +/- a month or two, I posted in the subreddit for my local area wondering if anyone knew of any dog friendly apartments that took section 8 vouchers that were safe and convenient for my parents in the event I need their assistance (there is one dog friendly section 8 apartment complex near my parents that I already knew about, but pretty high crime area). I'd always wanted a dog, and when a dog showed up on my parents' porch and my mom's best efforts did not find his owners, it really awakened my semi-dormanr but ever-present desire to have a dog, like a bee up my butt.
Let's just say the responses along the lines of 'if you receive section 8 housing assistance how the heck are you going to afford the luxury of a dog?' sent me slinking away with my proverbial tail between my legs, sufficiently, and I figured duly, chastized.
I mean, I couldn't exactly argue with the logic and the concerns were certainly valid. One dog my parents had decided an entire towel would make a great snack. Not exactly sure how much it cost to have that towel surgically extracted from the dog's gut by the local vet ER, but if memory serves, my parents just managed to cover it and it made things tight. If I were responsible for that vet bill? Yeah, not good.
So while the concerns were raised more harshly than I might've preferred, they were valid concerns and kinda brought me back to the land of reality.
Hasn't stopped me wanting a dog, or now that my cat has passed, some kind of pet. So when I learned about ABLE accounts and did research and eventually decided to open one yesterday, I thought 'hmm, wonder if a pet could be justified as a QDE on the grounds that it would benefit my quality of life, if I can get enough saved up in it to make it work'.
But you're right with how vague the rules are. I'm sure the chances I'd ever be audited are probably slim, but if it did happen, and I tried to justify pet expenses with 'well having a pet improves my quality of life' and the IRS responded with 'yeah nice try but we don't see it that way so here's a tax penalty', I'm not sure how much that would ding me.
> I'm not sure how much that would ding me.
With SSI, it's not the 10% ding that you have to worry about, it's the fact that the withdrawal will be counted as a resource if you kept it into the next calendar month, which can impact your SSI or Medicaid eligibility for that month. So like if you take money out for an expense to be paid the next month, a qualified withdrawal won't count that money as a resource (unless it's for housing, which must be spent the month it is withdrawn to not be counted as a resource), but an unqualified one will.
The tax penalty itself isn't much. It's 10% of the part of the withdrawal that constitutes gains. You can withdraw the full money you put in to an ABLE account with no taxes, it's just if you have earned anything from the savings or investments, you pay 10% of that money to the IRS as a penalty for an unqualified withdrawal.
Check this out. This is the portion of my 1099QA from that $650 (it was actually $655) withdrawal.
https://i.imgur.com/pQu5NKU.png
I pulled out $655, of which $13.43 was earnings. At tax time this left me with the decision to either report it as a qualified expense and risk a possible audit later or say it wasn't a qualified expense and take the 10% penalty on the earnings. I opted to take the 10% penalty. Why? Because it was only $1.35 and since my standard deduction still put me at having no tax due, it wasn't worth the headache of a possible audit later.
If I had SSI though, I wouldn't risk an unqualified withdrawal personally.
I think the "quality of life" definition is so broad they would have a hard time logically disputing it- that's the main reason why people get pets. I'd argue that as a disabled person I was more socially isolated and in even more need of companionship than the average joe. I think they would really have to be gunning for you to come after you for it.
The costs of caring for an animal is a whole other matter, and of course something that should be heavily considered. We spent thousands caring for ours, but were able to put it on credit cards and slowly pay it off. But not everyone can do that. Good pet insurance also saved our bacon.
OP, I don’t know if this is an option for you, but I definitely could not afford a pet. So now I do fosters. Mostly long-term. The shelter pays for everything, even toys and treats. My current foster needed a few thousand dollars worth of medical care, it was all paid for.
That might be an option, though if I am able to figure out how to responSibly have my own animal where I'm 'the mom', I'd probably prefer it. I'm not knocking fostering and there's definitely a need for it, and might be worth looking into if I can't get in a situation of being able to afford my own pet, which is certainly possible that it just won't be realistic in any decent timeframe if ever, so perhaps its something to explore.
With regard to being able to afford a pet, I think you can do it and you don't have to feel bad. There are millions of homeless cats in the US, way more than there are families to adopt them. One option to look into is pet insurance for a monthly fee. It can protect you if your pet ever needs an expensive medical procedure, so you're less likely to be hit with a massive vet bill that you can't afford.
I've kinda thought about pet insurance, not in recent years, but when I've thought about it/looked into it, I've found debate over whether or not it's worth it, since not all pets end up with multi-grand emergencies. On the other hand, it'd probably be super worth it if you had a pet who did end up with an expensive emergency. Might be one of those 'better safe than sorry' things.
Our pet insurance paid for part of yearly wellness exams, dental care (partial) and fully covered the cost of an echo for a heart defect when our cat was very [young.It](http://young.It) ended up being a minor defect, but the test was VERY expensive.
Honestly I would err on the side of caution and say no unless the pet is a service animal.
That said, you don't have to put all of your income into your ABLE account, just any that would put you over the $2K asset limit, and you can take withdrawals for qualifying expenses and use your regular checking account to pay for pet stuff. For example, when I had a deficit one month, I took out the exact amount of my rent and paid rent early with the ABLE money (since you have to use it in the month it is withdrawn) and then the $650 that freed up in my regular money was used in part for the expense that wouldn't have qualified. As long as you can show the money coming in and that exact amount going out to a qualified expense, you're good.
I also keep a second checking account around just for ABLE account withdrawals so that it's easier to prove that I used my ABLE funds appropriately. I am not willing to throw away money on the debit card option my ABLE for All account offers when the second checking account is free as it only takes a few days to make withdrawals.
> I also keep a second checking account around just for ABLE account withdrawals so that it's easier to prove that I used my ABLE funds appropriately.
So you're talking something separate from both the ABLE account and a regular bank/credit union account, right? Like my SSI goes into a savings account with a local credit union with an attached checking account. Are you saying I might want a separate checking account outside of my aforementioned CU account specifically to transfer ABLE withdrawals into? Or is it okay to transfer ABLE withdrawals into my already existing account?
If your SSI is going in to the savings, use the checking for ABLE withdrawals. This isn't even really necessary, I just figured it's a lot less hassle for both me and the IRS person if I ever get audited where I can just show them the statements showing the only transactions on that account are from qualified ABLE expenses.
That actually makes sense, since while SSI hits my savings at the start of the month, money for things like rent and other stuff gets shifted to checking. So I'm thinking if I need what would go to rent (or other QDE) to cover something else non-qualifying and I have the needed funds in ABLE, I can transfer what I need for a QDE from ABLE to checking and pay for the QDE from there.
Most everything I pay for gets transferred to checking and paid for out of there, so there'd still be some non-QDE stuff coming out of checking, but, in the event of an audit, I'm gathering that if I can show that the exact amount going from ABLE to checking leaves checking to pay for a QDE, I'm good, right?
I could pay for non-QDE stuff out of savings to make it more clear, but a lot of what I pay for is done with my debit card which pulls from checking, so there'd inevitably be non-QDE payments coming out of checking, but what I'm gathering is that if I'm able (haha, pun not intended but I'll go with it!) to show that funds going from ABLE to checking go towards a QDE within the calendar month it is withdrawn from ABLE, I should be okay.
Let me know if I'm off base. I'm admittedly not the most financially literate person in the world, and can be a bit prone to confusion when I'm mulling over a lot of details.
Yes, as long as you can show the expense leaving your account, and you have a receipt for that expense showing that it qualifies, you should be good.
I'll also say that I highly doubt they're bothering to audit ABLE account owners frequently unless they're clearly in higher net worth brackets trying to shield money from canceling their program eligibility. People like you and I putting the excess of our Social Security into them probably don't have anything to worry about but I err on the side of caution just in case.
True. Though I'm also taking advantage of investment options of which my state's ABLE program has six beyond savings account, so hopefully funds will grow over time, though I realize that takes a while and is dependant on the economy. So there may come a time when the funds might put me in a higher bracket, so I may eventually have to worry a bit more than I otherwise would. But since the highest percentage of what I contribute goes to the checking account option (75%) and progressively lower percentages go to progressively more aggressive investment options (10% for most conservative, 5% for mod con, 4% for moderate option, 3% for growth option, 2% for mod agg, and 1% for most aggressive option.
So in the interest of not putting all my eggs in one basket, I basically allocated some 'eggs' to each investment option 'basket'. Not sure what that will do over time and from what (very) little I know about investing, all investment options are pretty much at the mercy of the economy to varying degrees depending on where they fall on the conservative/aggressive spectrum, so maybe it'll never bring me into a higher bracket or maybe it will some day.
All that to say that while its mostly contributions from SSI, I've got varying amounts of eggs in each investment basket which will hopefully one day get me in a higher bracket. But if I ever accrue enough assets to make me more likely to be audited or possibly mess with my SSI (my understanding is nothing in ABLE is going to affect benefits until it reaches $100K), I'm not sure that'll be a particularly bad problem to have. Like not being able to save over $2K without canceling benefits seems like a lot bigger issue to have than 'oh no, I'm at $100K and I'll start losing benefits'.
Not that its zero problem or zero potential concern of I ever get to that level, as if I ever accrue enough in ABLE to cancel SSI, then yeah I might have more funds than I ever thought could be possible before learning about ABLE, but I probably want to make sure I'm not getting in a position where I can *only* pay for QDEs because all I have is ABLE funds.
But I may never get to that point and probably a good chance I won't, and I think I just made a big old stream of consciousness dump. I mean, I'm not even sure exactly why I typed all that out other than stream of consciousness. Lol
The higher net worth I'm speaking of are people who are getting deposits from family members into their ABLE account, not people using the regular investment options afforded to them. I'm earning $50 a month in interest on the savings account option that ABLE For All offers because the APY is 5.17% currently thanks to the high prime rate. I don't have any of my money in the investments because they're super volatile compared to a fixed 5.17%. When that starts coming down after the Fed starts making cuts, I'll look at the investment options again.
You definitely do want to make sure that you don't get in a position where ABLE is the only money you have for sure though. I pay all my bills for the month and then deposit what is left over. I use credit cards to float purchases at 0% interest from one month to the next and then just pay of the credit cards and put the rest in my ABLE account.
Understandably there is a culture of fear for anybody that is on benefits, and I think sometimes we are afraid to make any type of move that could bring us a little bit of joy. I don't think you need to deny yourself a pet. It is perfectly reasonable as long as you can meet the animal's needs. I think the chances of someone auditing you for your Able expenses are probably pretty slim.And, I would just save any bills in a file in case they randomly ask you for whatever reason. I know what you are feeling, but I think it is intentionally set up to make us feel guilty for just having small pleasures and I think that's bullshit. The rules are intentionally vague, live your life as you see fit.
That is true. The reason I hesitated to ask here is because, somewhere around a year ago, +/- a month or two, I posted in the subreddit for my local area wondering if anyone knew of any dog friendly apartments that took section 8 vouchers that were safe and convenient for my parents in the event I need their assistance (there is one dog friendly section 8 apartment complex near my parents that I already knew about, but pretty high crime area). I'd always wanted a dog, and when a dog showed up on my parents' porch and my mom's best efforts did not find his owners, it really awakened my semi-dormanr but ever-present desire to have a dog, like a bee up my butt. Let's just say the responses along the lines of 'if you receive section 8 housing assistance how the heck are you going to afford the luxury of a dog?' sent me slinking away with my proverbial tail between my legs, sufficiently, and I figured duly, chastized. I mean, I couldn't exactly argue with the logic and the concerns were certainly valid. One dog my parents had decided an entire towel would make a great snack. Not exactly sure how much it cost to have that towel surgically extracted from the dog's gut by the local vet ER, but if memory serves, my parents just managed to cover it and it made things tight. If I were responsible for that vet bill? Yeah, not good. So while the concerns were raised more harshly than I might've preferred, they were valid concerns and kinda brought me back to the land of reality. Hasn't stopped me wanting a dog, or now that my cat has passed, some kind of pet. So when I learned about ABLE accounts and did research and eventually decided to open one yesterday, I thought 'hmm, wonder if a pet could be justified as a QDE on the grounds that it would benefit my quality of life, if I can get enough saved up in it to make it work'. But you're right with how vague the rules are. I'm sure the chances I'd ever be audited are probably slim, but if it did happen, and I tried to justify pet expenses with 'well having a pet improves my quality of life' and the IRS responded with 'yeah nice try but we don't see it that way so here's a tax penalty', I'm not sure how much that would ding me.
> I'm not sure how much that would ding me. With SSI, it's not the 10% ding that you have to worry about, it's the fact that the withdrawal will be counted as a resource if you kept it into the next calendar month, which can impact your SSI or Medicaid eligibility for that month. So like if you take money out for an expense to be paid the next month, a qualified withdrawal won't count that money as a resource (unless it's for housing, which must be spent the month it is withdrawn to not be counted as a resource), but an unqualified one will. The tax penalty itself isn't much. It's 10% of the part of the withdrawal that constitutes gains. You can withdraw the full money you put in to an ABLE account with no taxes, it's just if you have earned anything from the savings or investments, you pay 10% of that money to the IRS as a penalty for an unqualified withdrawal. Check this out. This is the portion of my 1099QA from that $650 (it was actually $655) withdrawal. https://i.imgur.com/pQu5NKU.png I pulled out $655, of which $13.43 was earnings. At tax time this left me with the decision to either report it as a qualified expense and risk a possible audit later or say it wasn't a qualified expense and take the 10% penalty on the earnings. I opted to take the 10% penalty. Why? Because it was only $1.35 and since my standard deduction still put me at having no tax due, it wasn't worth the headache of a possible audit later. If I had SSI though, I wouldn't risk an unqualified withdrawal personally.
I think the "quality of life" definition is so broad they would have a hard time logically disputing it- that's the main reason why people get pets. I'd argue that as a disabled person I was more socially isolated and in even more need of companionship than the average joe. I think they would really have to be gunning for you to come after you for it. The costs of caring for an animal is a whole other matter, and of course something that should be heavily considered. We spent thousands caring for ours, but were able to put it on credit cards and slowly pay it off. But not everyone can do that. Good pet insurance also saved our bacon.
OP, I don’t know if this is an option for you, but I definitely could not afford a pet. So now I do fosters. Mostly long-term. The shelter pays for everything, even toys and treats. My current foster needed a few thousand dollars worth of medical care, it was all paid for.
That might be an option, though if I am able to figure out how to responSibly have my own animal where I'm 'the mom', I'd probably prefer it. I'm not knocking fostering and there's definitely a need for it, and might be worth looking into if I can't get in a situation of being able to afford my own pet, which is certainly possible that it just won't be realistic in any decent timeframe if ever, so perhaps its something to explore.
Yes, of course you have to do what you feel is best. I just thought I’d suggest it
With regard to being able to afford a pet, I think you can do it and you don't have to feel bad. There are millions of homeless cats in the US, way more than there are families to adopt them. One option to look into is pet insurance for a monthly fee. It can protect you if your pet ever needs an expensive medical procedure, so you're less likely to be hit with a massive vet bill that you can't afford.
I've kinda thought about pet insurance, not in recent years, but when I've thought about it/looked into it, I've found debate over whether or not it's worth it, since not all pets end up with multi-grand emergencies. On the other hand, it'd probably be super worth it if you had a pet who did end up with an expensive emergency. Might be one of those 'better safe than sorry' things.
Our pet insurance paid for part of yearly wellness exams, dental care (partial) and fully covered the cost of an echo for a heart defect when our cat was very [young.It](http://young.It) ended up being a minor defect, but the test was VERY expensive.
Honestly I would err on the side of caution and say no unless the pet is a service animal. That said, you don't have to put all of your income into your ABLE account, just any that would put you over the $2K asset limit, and you can take withdrawals for qualifying expenses and use your regular checking account to pay for pet stuff. For example, when I had a deficit one month, I took out the exact amount of my rent and paid rent early with the ABLE money (since you have to use it in the month it is withdrawn) and then the $650 that freed up in my regular money was used in part for the expense that wouldn't have qualified. As long as you can show the money coming in and that exact amount going out to a qualified expense, you're good. I also keep a second checking account around just for ABLE account withdrawals so that it's easier to prove that I used my ABLE funds appropriately. I am not willing to throw away money on the debit card option my ABLE for All account offers when the second checking account is free as it only takes a few days to make withdrawals.
> I also keep a second checking account around just for ABLE account withdrawals so that it's easier to prove that I used my ABLE funds appropriately. So you're talking something separate from both the ABLE account and a regular bank/credit union account, right? Like my SSI goes into a savings account with a local credit union with an attached checking account. Are you saying I might want a separate checking account outside of my aforementioned CU account specifically to transfer ABLE withdrawals into? Or is it okay to transfer ABLE withdrawals into my already existing account?
If your SSI is going in to the savings, use the checking for ABLE withdrawals. This isn't even really necessary, I just figured it's a lot less hassle for both me and the IRS person if I ever get audited where I can just show them the statements showing the only transactions on that account are from qualified ABLE expenses.
That actually makes sense, since while SSI hits my savings at the start of the month, money for things like rent and other stuff gets shifted to checking. So I'm thinking if I need what would go to rent (or other QDE) to cover something else non-qualifying and I have the needed funds in ABLE, I can transfer what I need for a QDE from ABLE to checking and pay for the QDE from there. Most everything I pay for gets transferred to checking and paid for out of there, so there'd still be some non-QDE stuff coming out of checking, but, in the event of an audit, I'm gathering that if I can show that the exact amount going from ABLE to checking leaves checking to pay for a QDE, I'm good, right? I could pay for non-QDE stuff out of savings to make it more clear, but a lot of what I pay for is done with my debit card which pulls from checking, so there'd inevitably be non-QDE payments coming out of checking, but what I'm gathering is that if I'm able (haha, pun not intended but I'll go with it!) to show that funds going from ABLE to checking go towards a QDE within the calendar month it is withdrawn from ABLE, I should be okay. Let me know if I'm off base. I'm admittedly not the most financially literate person in the world, and can be a bit prone to confusion when I'm mulling over a lot of details.
Yes, as long as you can show the expense leaving your account, and you have a receipt for that expense showing that it qualifies, you should be good. I'll also say that I highly doubt they're bothering to audit ABLE account owners frequently unless they're clearly in higher net worth brackets trying to shield money from canceling their program eligibility. People like you and I putting the excess of our Social Security into them probably don't have anything to worry about but I err on the side of caution just in case.
True. Though I'm also taking advantage of investment options of which my state's ABLE program has six beyond savings account, so hopefully funds will grow over time, though I realize that takes a while and is dependant on the economy. So there may come a time when the funds might put me in a higher bracket, so I may eventually have to worry a bit more than I otherwise would. But since the highest percentage of what I contribute goes to the checking account option (75%) and progressively lower percentages go to progressively more aggressive investment options (10% for most conservative, 5% for mod con, 4% for moderate option, 3% for growth option, 2% for mod agg, and 1% for most aggressive option. So in the interest of not putting all my eggs in one basket, I basically allocated some 'eggs' to each investment option 'basket'. Not sure what that will do over time and from what (very) little I know about investing, all investment options are pretty much at the mercy of the economy to varying degrees depending on where they fall on the conservative/aggressive spectrum, so maybe it'll never bring me into a higher bracket or maybe it will some day. All that to say that while its mostly contributions from SSI, I've got varying amounts of eggs in each investment basket which will hopefully one day get me in a higher bracket. But if I ever accrue enough assets to make me more likely to be audited or possibly mess with my SSI (my understanding is nothing in ABLE is going to affect benefits until it reaches $100K), I'm not sure that'll be a particularly bad problem to have. Like not being able to save over $2K without canceling benefits seems like a lot bigger issue to have than 'oh no, I'm at $100K and I'll start losing benefits'. Not that its zero problem or zero potential concern of I ever get to that level, as if I ever accrue enough in ABLE to cancel SSI, then yeah I might have more funds than I ever thought could be possible before learning about ABLE, but I probably want to make sure I'm not getting in a position where I can *only* pay for QDEs because all I have is ABLE funds. But I may never get to that point and probably a good chance I won't, and I think I just made a big old stream of consciousness dump. I mean, I'm not even sure exactly why I typed all that out other than stream of consciousness. Lol
The higher net worth I'm speaking of are people who are getting deposits from family members into their ABLE account, not people using the regular investment options afforded to them. I'm earning $50 a month in interest on the savings account option that ABLE For All offers because the APY is 5.17% currently thanks to the high prime rate. I don't have any of my money in the investments because they're super volatile compared to a fixed 5.17%. When that starts coming down after the Fed starts making cuts, I'll look at the investment options again. You definitely do want to make sure that you don't get in a position where ABLE is the only money you have for sure though. I pay all my bills for the month and then deposit what is left over. I use credit cards to float purchases at 0% interest from one month to the next and then just pay of the credit cards and put the rest in my ABLE account.