The new year is well under way and so is tax season. Although this time can seem stressful for seniors, it is possible to successfully navigate tax preparation and filing. Here are a few things to keep in mind.
1. Know What You're Entitled To
The tax benefits that come with being 65 or older can be surprising and even easy to miss. For instance, if you do not itemize your deductions, you could get a higher than average amount of your standard senior deduction. This amount increases further if you or your spouse are blind.
Another benefit seniors may miss is the Care for the Elderly or Disabled credit. This credit only applies if either you or your spouse is disabled. The amount you receive is based on age, filing status, and income. Credits are always good! And you'll need them if you don't heed the next bit of advice.
2. Be Careful with Social Security
Figuring out the taxable amount of your Social Security benefits can be a complete nightmare. If you are preparing your own taxes, it is essential that you (very carefully) complete the Social Security benefits worksheet. You can even ask for 2, so you can double check your work. Remember, this only applies if your provisional income is over $32,000 a year, then you must pay taxes on your Social Security.
Does all of this already sound like too much? Luckily, our next bit of advice will help you avoid paying too much and know when you're entitled to more.
3. Have Someone Prepare Your Taxes For Free
Tax Counseling for the Elderly (TCE) is a service available to taxpayers 60 years or older. IRS-certified volunteers will review your taxes with you and assist with everything down to the final filing. The volunteers are also knowledgeable about tax issues involving pensions and other issues relevant to senior citizens. The IRS website has a handy locator so you can find a TCE representative near you. There's nothing better than getting an expert to do it for you!
4. Beware of Scammers
Scammers take advantage of every tragedy, natural disaster, holiday, and every other occasion to prey on innocent people, very often seniors. So remember that the IRS and other agencies will not make unsolicited contact via phone, text, email, or any other method, to request personal information.
If you or a loved one has received scam calls, follow these tips:
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Hang up! (If they call again, hang up again and again.)
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Never give them any personal information no matter who they claim to be. Scammers are good at pretending to be a higher authority to trick you into being submissive to them and doing what they want.
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Never buy a prepaid debit card or gift card and give them the number to pay any "dues."
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Never wire any money over the phone.
5. Start Preparing for Next Year
Start preparing for next year by getting and staying organized. Be sure that your paper documents are in one place and that your electronic records are easily accessible. It will take a lot of the stress out of tax time.
If you are unsure about anything regarding filing and preparing your taxes, it is wise to speak to a reputable tax professional.