10 Tax Exemptions You Should Know

Veterans With Disabilities
U.S. military veteran and amputee Lloyd Epps swings a driver while at the gait and motion analysis lab at the VA hospital in New York City. Epps lost his leg to an infection and wears a high-tech custom prosthetic. John Moore/Getty Images

Disabled veterans have made an enduring sacrifice for their country. These disabilities may exclude them from better-paying jobs or paid employment of any kind. Both federal and state legislators recognize the high price that disabled veterans have paid by offering a number of tax exemptions specifically for disabled vets.

On the federal level, disabled veterans can exclude all disability compensation and pension benefits from their gross income. That includes grants for homes or motor vehicles modified for greater accessibility [source: IRS]. Additionally, any money that a disabled vet earns as part of a Compensated Work Therapy (CWT) program is tax-exempt [source: IRS].

In addition, all 50 states offer some sort of property tax exemption for disabled vets [source: Duncan]. Some states require that the veteran be 100 percent disabled, while others are more generous. In general, the state property tax exemptions only cover a portion of the value of the home. Others limit the exemption based on income level.