Introduction
Maximize your deductions with our tax season tips for elderly individuals. As you get older, it’s important to know the tax implications of aging. The first step is understanding how your income, assets and expenses change as you age. This can be done by creating a budget for your retirement years and reviewing it annually to make sure that it still reflects your needs at that time. Tax planning should also be part of any financial planning process because it can help reduce taxes owed while helping maximize deductions that are available based on age-related changes (i.e., medical expenses).
This guide will provide our tax season tips for elderly individuals. We’ll tell you what’s new this year when filing taxes as well as other helpful resources such as free tax preparation sites where seniors can go online or call to receive assistance with completing their returns.
Tax Considerations for Elderly Individuals
The tax brackets for seniors are based on the age of the individual and their filing status, which can be single or married. The IRS has set up three different brackets for each situation:
- The first bracket covers those who are 65-69 years old. In this bracket, you’ll pay 10% on your taxable income up to $9,525 per year (for single filers).
- The second bracket covers those who are 70-79 years old. In this bracket, you’ll pay 12% on your taxable income up to $19,050 per year (for single filers).
- The third bracket covers those who are 80+ years old. In this bracket, you’ll pay 22% on your taxable income up to $28,600 per year (for single filers).
Tax Benefits for Elderly Individuals
- Tax credits.
- Deductions.
Tax Season Tips for Elderly Individuals- Planning Strategy
Tax planning strategies for elderly individuals can be used to help reduce your tax liability and maximize deductions. These include:
- Tax minimization strategies, such as contributing to a traditional IRA or Roth IRA, which will allow you to take advantage of the annual deduction limit.
- Tax planning software, which can help you plan your finances and make sure that you’re taking advantage of all available deductions.
- Tax preparation services, which provide professional assistance with filing taxes so that you don’t miss any important steps or deadlines in order for your return to be processed correctly by the IRS
Tax Season Tips for Elderly Individuals- Filing
Tax filing requirements:
- You must file a tax return if your income is at least $10,000. If you are married and filing jointly, the threshold is $20,000.
- You can claim an exemption for yourself on your tax return if you are 65 or older by the end of the year and meet other requirements (for example, having lived in the U.S. for more than half of 2014).
- The IRS offers free help with preparing and filing federal income tax returns through its Volunteer Income Tax Assistance program (VITA) and Tax Counseling for the Elderly program (TCE). Both programs offer free tax preparation services to low-income individuals who qualify based on age or disability status; some locations also offer free electronic filing options at no cost to taxpayers who earn less than $58,000 per year ($116K if married filing jointly).
Tax Season Tips for Elderly Individuals- Resources
Tax preparation services are a great option for seniors who want to file their taxes but aren’t sure how to do it. They can help you determine what deductions and credits you qualify for, as well as make sure that everything is done correctly.
Tax advisors are another option for those who want assistance with their taxes but don’t have the time or resources to do it themselves. Many tax advisors offer free consultations so you can get an idea of what they charge before committing yourself financially.
There are also several websites that offer free online tax filing options–just be sure to double check which forms they’re compatible with before using them!
Tax Relief for Elderly Individuals
- Tax deferment. This is a special type of loan that allows you to borrow money from your 401(k) or IRA without having to pay taxes on the interest. If you’re over age 59 1/2 and have an outstanding balance in your retirement account, this is one way that seniors can avoid paying taxes on their savings.
- Tax forgiveness. If you’re not able to pay back your student loans due to financial hardship, then Uncle Sam may forgive some or all of them under certain circumstances (such as disability). But there’s no guarantee–you’ll need to apply with each lender individually and ask them what they’ll allow based on your situation.
Tax Benefits for Caregivers of Elderly Individuals
- Tax deductions. You can deduct any expenses you paid for your elderly relative’s care, including medical bills, transportation costs and long-term care insurance premiums.
- Credits. You may also be eligible for the credit for dependent care expenses if you paid someone else to take care of your dependent while you worked or looked for work during the year (such as a grandchild).
Common Tax Questions for Elderly Individuals
- What are the tax filing requirements for seniors over 65?
- What deductions can I take as a senior?
- Are there any credits that apply to me as a senior citizen?
Conclusion
Taxes are a fact of life, and the elderly are vulnerable to tax scams and fraud. It’s important to understand that seniors have different needs from other taxpayers, so it’s crucial to know what deductions you can take advantage of as you prepare your taxes this year.
Tax breaks and credits available for elderly individuals include:
- The standard deduction for those 65 or older is $1,300 (up from $1,250 in 2018). This amount is doubled if both spouses qualify for the deduction. You may also be able to claim an additional standard deduction if you have high medical expenses due to age or disability; however, this must be claimed on Form 1040A rather than 1040EZ because it requires additional documentation (see below).
- If you itemize deductions on Schedule A instead of taking the standard deduction, there are two major changes worth noting: First off, medical expenses can only be deducted if they exceed 7.5% of adjusted gross income instead of 10% like before–and secondly–you no longer need receipts! That said though…you still need proof that what was bought qualifies as “medical care” under IRS rules such as prescriptions filled at pharmacies (not drugstores) within 60 days prior/after year end date
These are just a few of our our tax season tips for elderly individuals. We hope filing your taxes goes smoothly!
From,
The Zemplee Team
