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5 Tax Preparation tips for Seniors & Caregivers

By Tina Patel

Tax time is here, and tax preparation becomes one more duty for family caregivers to take on. Taxes may be the last thing on your mind when you’re worried about caring for an aging loved one. The good news is that the Tax Cuts and Jobs Act (TCJA) of 2018 essentially doubled standard deductions for everyone. Meaning the standard deduction seniors can claim before they claim the bonus deduction for being age 65 or older, is far better than it was. In other words, most seniors (and caregivers) will do pretty well with income tax returns this year.

With all that in mind, we've put together 5 tax preparation tips to help you glide through tax season. From the basic standard deduction for seniors to finding qualified free tax help, we've gathered some general resources to help you file your loved one's return.

1. Take Advantage of the Standard Deduction for Seniors & Spouses

The IRS states "If you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older. You can get an even higher standard deduction amount if either you or your spouse is blind."

In other words, seniors utilizing the standard deduction instead of an itemized deduction can get a better tax break this year. No special itemization also makes this deduction over and beyond the TCJA's improved deductions.

Seniors can file with a standard deduction if they

  • Accepted payments from Social Security,
  • Took few or no payments from retirement savings, IRAs, and pensions, and
  • Didn’t run a business

However, if your aging family member did have several sources of income this year, you might want to seek professional help.

2. Use VITA, the Free Tax Return Preparation Services Provided by the IRS

As per the IRS website "The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $56,000 or less, persons with disabilities and [other] taxpayers who need assistance in preparing their tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals."

Therefore, if your loved one made less than $56,000 in 2019, then they may qualify for free tax assistance. However, these services vary by location. Trained volunteers provide help for seniors filing taxes and can handle most basic income tax returns for seniors. Seniors with more complicated tax returns may want to consider paying a trained professional instead or the option in #3.

To utilize this service, be sure to bring all the right documents, like ID cards, pay stubs, and a copy of last year's return if you have it. If you're an overwhelmed caregiver at tax time, VITA is an outstanding service for basic tax situations! 

3. Utilize TCE, Another Program for Adults Ages 60+

The Tax Counseling for the Elderly (TCE) program provides tax help for all taxpayers, but particularly those who are 60+. They specialize in the topics that mean most to older citizens, like pensions and retirement-related issues. If your senior loved one has a more complicated tax situation, TCE is a terrific starting point for free tax help. Unlike VITA, these IRS-certified volunteers are associated with non-profit organizations that receive grant funding from the IRS, like the AARP foundation.

Both VITA and TCE sites are found at senior centers, libraries, schools, shopping malls, and similar locations. To locate the nearest VITA or TCE site near you, use the VITA Locator Tool or call 800-906-9887.

4. Take Advantage of the Tax Credit for Elderly/Disabled Individuals

If you're 65 or older or younger but permanently disabled, you can qualify for the Credit for Elderly or Disabled. It's based on your age, filing status, and income, and gives even more relief for low-income seniors.

To qualify, you must meet the following requirements:

  • Your income must be less than $17,500 ($20,000 if married filing jointly), $25,000 (married filing jointly and spouses are disabled), or $12,500 (married filing separately).
  • Also, the nontaxable part of your Social Security or other nontaxable pensions is less than $5,000 (single, head of household); $5,000 (married filing jointly and only one spouse qualifies); $7,500 (married filing jointly and both qualify); or $3,750 (married filing separately).

Social Security payments taxable may also be taxable depending on your total income. If you have several sources of taxable income (like an investment property, stocks and bonds, retirement plans, annuities, or a part-time job), you might end up paying taxes on some, or all, of your Social Security income. When preparing your return, be especially careful when calculating the taxable amount of your Social Security.

5. Maybe Don’t Bother with Taxes

The income threshold for seniors over age 65 was raised to $13,600 for singles and $26,600 for married couples if both spouses are 65 or older. If only one spouse is 65 the limit is $25,300. If you earned less than those amounts in 2019, then you don't even need to bother with all with taxes this year.

We hope these tax tips are helpful for family caregivers and seniors filing a tax return for last year. For any questions or concerns regarding senior care, reach out to our home care professionals.

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