How To Make The Most Of Your Tax Deductions As A Senior
Filing taxes happens every year and the IRS says it's "likely" for individuals filling out their taxes to make mistakes when preparing their tax returns. For individuals over 65, tax deductions can change, so it's important to do all you can to understand how to take advantage of all the tax deductions and credits available to you.
What Kind Of Deductions Can Senior Loved Ones Take?
Depending on your income, source(s) of income, marital status, and a few other things, you may be eligible for enough deductions and credits which will significantly lower your tax bill.
Standard Deduction
The first deduction is the standard deduction which, after age 65, is more than usual, as long as you don't itemize your deductions. If you or your spouse are blind, you can get an even higher standard deduction. If you and your spouse file jointly, you can earn up to $27,300 if you or your spouse is 65 or older. If you're both 65 or older, your deduction could be $27,800. The form for this is Form 1040 and Form 1040-SR instructions. It includes instructions and information.
Credit For The Elderly Or Disabled
The IRS has a tax credit specifically for individuals who are seniors (or who are retired and disabled). According to the IRS, this credit is "for taxpayers:
- aged 65 or older OR retired on permanent and total disability and received taxable disability income for the tax year; AND
- with an adjusted gross income OR the total of nontaxable Social Security, pensions annuities or disability income under specific limits."
According to experts, these income limits are:
- $17,500 or more and your filing status is single, head of household, or a qualifying widow or widower
- $20,000 or more and you're married, but only one of you otherwise qualifies for the credit
- $25,000 or more, and you file a joint married return
- $12,500 or more, and you file a separate married return, but you lived apart from your spouse all year
They note these limits are based on your Adjusted Gross Income, not your gross income. Learn more about this credit from Publication 524, Credit for the Elderly or the Disabled.
Medical Expenses
Certain medical expenses can be deducted from your 2022 taxes, but there are limitations and exceptions. It's important to keep a very accurate list of all of your deductible medical expenses, including:
- False teeth, eyeglasses, hearing aids, artificial limbs, wheelchairs, oxygen, and oxygen equipment
- Certain hospital services fees like lab work, nursing services, and some surgeries
- Some doctors, dentists, surgeons, and specialists' medical fees
- Medicare Part A premium
- Medicare Part B and Medicare Part D premiums
- Nursing home care (including meal and lodging costs)
- Prescription drugs and insulin
- Qualified long-term care services
- Transportation and car expenses related to travel to medical care
Find out more about medical expense deductions, here.
Charitable Donations
Charitable donations are always tax-deductible, but the amount will vary depending on the type of donation, organization, and income amount. You can find out more about charitable contribution donations from the IRS, here.
Home Improvements And Repairs
Generally, home improvements and repairs are not tax-deductible, but in the event of those over 65, they could be. Home improvements and repairs that are done for medical purposes may qualify as tax-deductible. To find out more, read Publication 530, Tax Information for Homeowners from the IRS.
Tax Tips For Seniors
When you're working hard to stay active, healthy, and happy over the age of 65, sometimes it's challenging to keep track of everything else that needs to be done, especially if you don't have a lot of help from loved ones. It's helpful at tax time, to have clear and accurate records of your expenses, to make sure you get all the credits and deductibles you can. This helps those doing your taxes, to provide you with the highest return possible, on your taxes or, in the case of owing taxes, paying the least amount. If you live in the Scottsdale, Mesa, Paradise Valley, Fountain Hills, Care Free, or Cave Creek areas, Senior Helpers can provide you with assistance to help you stay on track with your activities, and help you stay organized. Reach out to our caring staff, to find out how Senior Helpers in Scottsdale, can help you, today.