While doing taxes this year, every senior should be aware of their deductions. If you're a senior or retired, be sure to understand and take advantage of the following deductions.
1. Selling Your House
As we get older, we often move to more efficient living quarters. And if there's a house, it typically gets sold off. The profits on the sale will be taxed, but there are all kinds of deductions you can claim at the same. Everything from the property taxes for the portion of the year you owned it, to legal fees, to the costs of improvements you made can be claimed when the house is sold.
2. Medical Costs
The older we get, the more often it seems we have to go to the doctor. And while most seniors will have Medicare, that won't cover everything. Out-of-pocket costs can often be claimed as tax deductions, and that can add up quickly when you're taking a dozen medications.
Here are a few items that may qualify for a deduction:
- Artificial limb
- Braille books and magazines
- Home Modifications for disabilities
- Car or the cost of special equipment so a disabled person can drive
- Chiropractor & acupuncture
- Dental Care & dentures
- Diagnostic devices
- Prescription drugs
- Eyeglasses & hearing aids
- Eye surgery
- Psychiatric care
- Stop smoking program
- Transportation to receive medical care (mileage, parking, tolls)
- Wheelchairs, or crutches
- Wig (if hair is lost due to medical condition or treatment)
3. Retirement Plan Contributions
While this is a deduction anyone can use, it's more prominent among seniors who are reaching the end of their working lives. Contributions to retirement accounts are often tax-deductible and the interest earned in many of them is also tax-free. Consult with your bank to find out what you qualify for.
Making an investment is supposed to earn you money, and that money will be taxed. However, the fees, losses, and other charges associated with investments from mutual funds to the stock market can often be claimed on your taxes. This is particularly common among seniors, since they're they ones who tend to make the most investments.
5. Business Expenses
You're never too old to run a business, and businesses have costs. If your business has certain expenses, or losses, then those can be claimed come tax season. This is particularly true if your business experiences serious losses, which in many cases can be written off on your end-of-year check to the government.
At Caring Senior Service, our expert staff is comprised of extremely knowledgeable, friendly, and trusted professionals who take pride in helping your loved one manage their daily activities. Contact the Caring team near you today to learn more!