11 Tax Tips For Seniors

~from American Care Managers Newsletter

We’re coming down the backstretch for filing taxes.  This means we are all scrambling to get a hold of our W-2s, meet with our accountants and determine what deductions we can include in order to get a hefty tax return or minimize money owed to the government.  Tax time does not exclude seniors as much as they might like it to.   Seniors still need to file their taxes and keep abreast on what they can deduct in relation to their healthcare needs and annual expenses.
Before a senior person completes and files their taxes they should consider the following tips:
1. Assume that a senior person will ALWAYS have to file their taxes, even though social security is generally not taxable, in some instances it is.  Many seniors have additional income above social security that can push them into a different bracket.
2. If a senior person has additional income above social security, there is an excellent chance their social security will be taxed.  Seniors need to determine how much of their Social Security benefits may be taxable, if any.  The following should be done:
• Calculate their “base amount.”
• Determine if the base amount is equal to half of their Social Security benefits plus their other income (including tax-exempt interest). If that amount exceeds the limits for their filing status, some portion of their benefits will be taxable.
For 2009, the limits are: $25,000 for single, head of household, or qualifying widow(er);   $25,000 for married filing separately if they lived apart from their spouse during the year; $32,000 for married filing jointly; and $0 for married filing separately when they lived with their spouse during the year.
3. If a senior person files using the standard deduction, they may be entitled to a higher deduction if they are over 65 years old.  For the year 2009 the deduction is $1,100 per married taxpayer and $1,400 if single.
4.  If a senior person or their spouse is blind, they are entitled to an even higher deduction.
5. Making Work Pay Credit: Seniors only qualify if they receive earned income, even on a part time basis.
6. Additional tax credits. There is credit for the elderly or disabled who are at least 65 years old or are considered permanently and totally disabled.   These seniors must meet income qualifications found by filling out a 1040 or 1040 a form.
7. If a senior person is taking care of grandchildren or has some other dependant they may be able to claim them as dependants on their tax form.
8. Local and state taxes don’t go away with age, make sure to pay these.  Many states offer credits or exemptions for seniors, once they reach a certain age or income level.  Many times these credits are refundable so a senior can actually receive money without ever having to have paid anything.  This is available in New Jersey and Pennsylvania.
9. Make sure to stay up to date on the tax code since it changes regularly and a senior person might be filling incorrectly or giving up to much money.
10.  Seniors are able to get free help from community groups, the IRS, Tax consulting for the Elderly, and AARP Tax-Aide.
11.  Make sure a senior person sets up direct deposit so they do not have to worry about depositing a check, misplacing it, paying bills on time, etc.

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Filed under elder care raleigh nc, Geriatric Care Management, NC, Raleigh

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