Check Out Our 5 Tips on Filing Your Taxes
Tax season is upon us, folks. Maybe you’re in your Rome GA assisted living community dreading the looming task that is tax prep! Naturally everybody hopes to find ways to save money on their taxes or maximize the return received, and seniors are no exception to this rule. If you are over 50 years of age, we have got a few tips on tax breaks for seniors that might help you save some green. We hope you’ll find this info interesting and useful.
Pro Tip 1: Higher Standard Deduction for Seniors
If you and/or your spouse are 65 years old or up (and you don’t itemize your deductions), you can actually reap the benefits of a higher deduction amount when you file your return. Also, did you know there’s an additional increase in standard deduction if either of you suffers blindness?
Pro Tip 2: Tax Credit for the Elderly or Disabled
At ages 65 and up, if you are totally or permanently disabled, you may be eligible for the Credit for the Elderly or Disabled, which is based on age, income, and filing status. In order to get the credit, you must meet the following requirements:
Your income on Form 1040, line 38 is less than $17,500 if single, $20,000 if married and filing jointly with one qualifying spouse, or $25,000 if married, filing jointly where both parties qualify.
Your non-taxable Social Security or other pensions, disability payments, or annuities add up to less than $5,000 (if filing as head of household OR married and filing jointly with one party qualifying), $7,500 if married, filing jointly, and both parties qualify, or $3,750 if you are married, filing separately, and lived apart for the whole year.
Pro Tip 3: Retirement Account Limit Increase
At age 50, you become eligible to put up to $24,500 to into a retirement account, and defer paying tax on that amount. This is a great way to save while also enjoying the inherent tax benefit.
Pro Tip 4: No Early Withdrawal Penalties
Once you hit age of 59 1/2, you will no longer be penalized if you withdraw money from your IRA account. Before you reach that age, you will be required to pay a 10% fee on any amount withdrawn. Additionally, if you leave a job or your employment is terminated and you’re 55 or older, you may also withdraw money from a 401(k) without any having to pay fees. Even so, you would be required to pay tax on that additional income.
Pro Tip 5: Higher Filing Threshold for Seniors
Taxpayers ages 65 and older can earn an income of $1,600 more, or $2,600 if married, filing jointly, and both parties are 65 or older, before they need to file a tax return. So what that means is that older taxpayers with an income of $13,600 or less ($26,600 if married and filing jointly), may not even need to file an income tax return at all.
No matter what your situation, we hope you find these tips helpful! Tax prep for seniors doesn’t have to be a daunting endeavor, and there are ways to ensure you get the highest possible benefit when filing your tax return.