Being older CAN have its advantages. Among them are these potentially money-saving tips from the IRS, for those of you who have not already done your taxes.
If you and/or your spouse are 65 years old or older, you can get a higher standard deduction amount if you do not itemize your deductions. And if either you or your spouse is blind, you can get an even higher standard deduction amount.
One suggestion I would add about the Standard Deduction for Seniors: If you are unsure which path is better for you, prepare your taxes both ways: Both with itemizing deductions and without itemizing deductions and compare your results. Naturally, you’ll want to choose the path that reduces your tax burden or increases your Refund.
How much of your Social Security benefits are taxable depends on the total amount of your (and your spouse’s) benefits and other income. Generally, the higher that total amount, the greater the taxable portion of your Social Security. The IRS worksheet will help. See IRS publication 915.
You must file your taxes using Form 1040 or Form 1040A to receive the Credit for the Elderly or Disabled. You cannot get this credit if you file using Form 1040EZ. The credit is based on your age, filing status and income. You may be able to take the credit if:
You and/or your spouse are either 65 years or older…or under age 65 years old and are permanently and totally disabled.
Your income on Form 1040 line 38 is less than $17,500, $20,000 (married filing jointly and only one spouse qualifies), $25,000 (married filing jointly and both qualify), or $12,500 (married filing separately and lived apart from your spouse for the entire year).
The non-taxable part of your Social Security or other nontaxable pensions, annuities or disability income is less than $5,000 (single, head of household, or qualifying widow/er with dependent child); $5,000 (married filing jointly and only one spouse qualifies); $7,500 (married filing jointly and both qualify); or $3,750 (married filing separately and lived apart from your spouse the entire year).
Use Schedule R, Credit for the Elderly or Disabled, to figure the amount of the credit. See the instructions for Schedule R if you want the IRS to calculate it for you.
The IRS has publications to help you. In addition to publication 915, which I mentioned earlier, the IRS also offers
Publication 524 (Credit for the Elderly or Disabled)
Publication 554 (Tax Guide for Seniors)
The IRS also sponsors volunteer tax assistance programs that offer free tax help to seniors and others who cannot prepare their own tax returns.
Yes, taxes can be intimidating. But with a little bit of time and patience, you can keep more of your hard-earned money!
All information noted above is adopted from the US Internal Revenue Service Web page.
Do you need a second opinion? Let Andrea Donovan Senior Living Advisors help. Call us at (708) 415-2934 or email us. Please visit our website. Please watch my video to learn how the process works and learn what some clients have to say.