Being that it is time that we all need to start filing our taxes, I’ve put together this list of tax tips for seniors hoping that it can help you deal with this dreaded time of year.
The first and most asked question I receive is…”Is there any free help for seniors filing taxes?”
The answer is yes.
There is the IRS Volunteer Income Tax Assistance program (VITA) and the Tax Counseling for the Elderly (TCE).
Specially trained volunteers will help low-income individuals to prepare their taxes properly. There is a maximum income limit of $52,000 to qualify for the program and the volunteers are specifically trained to assist low-income individuals in finding help receiving special tax credits that apply to them.
These credits include the Earned Income Tax Credit, Credits for the Elderly and Disabled and the Child Tax Credit (not something that most seniors would need…however if you ere the legal guardian of your grandchildren this could be a viable option).
To find a local VITA site click here.
The Tax Counseling for the Elderly Program is designed for those 60 or older who have specific questions about pensions and retirement issues. There is no “application” to become involved in the program. Just go to the link above for the VITA sites and that is the same way you access the TCE program.
Are My Social Security Benefits Taxable?
According to the IRS, “Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.“
So if you have other income besides Social Security, then there’s a chance your Social Security benefits could be taxed. But if it is your only source of income then you are in the clear.
Items To Bring To Make Sure To Bring To Your Accountant/VITA site
- Picture ID
- Social Security card or verification letter from Social Security Administration
- Birth dates and SSN on yourself and dependents
- W-2, 1099 and all interest income statements
- Last years Federal and State tax forms
- Routing information for direct deposit of your refund
- Any information verifying deductions (will talk about that below…)
Seniors, who generally live on fixed incomes and have higher medical expenses, can sometimes deduct these expenses if they hit the IRS guideline.
According to the IRS guideline, you can deduct medical expenses if they exceed 7.5% of your adjusted gross income.
Allowable expenses towards the 7.5% include insurance premiums (including LTC insurance), prescription drug bills, durable medical equipment, home heath care, dentures, etc…
Now, the thing to be careful of is that the rules do change from year-to-year. Therefore, speak to an accountant or a VITA/TCE adviser regarding the feasibility of taking these deductions.
I Only Get Social Security…I Don’t Have To File
Sound familiar? Well, it doesn’t necessarily mean that you don’t have to file. It probably is true if you only get Social Security, but if you have income of any form other than your benefits you will have to file.
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