Though tax season can be daunting, it does not have to be overwhelming. At Senior Helpers Jersey Shore, we understand that taxes may seem complicated for senior citizens. Don't worry, we are here to help you through this process with our senior's guide to tax! With this, seniors will know what they need to successfully file their taxes before the April 15th deadline.
Are There Senior-Specific Tax Credits/Deductions/Exemptions?
The IRS allows several deductions and credits that specifically apply to seniors:
- The Senior Tax Credit is a reduction in taxes for those aged 65 or older.
- The Saver's Credit lets qualifying taxpayers receive up to 50 percent of the total extraordinary contributions made to an IRA, 401(K), or other retirement plans.
- Qualifying seniors can deduct medical expenses that exceed 7.5% of their income as part of their itemized deduction.
- Seniors may also be eligible for property tax exemptions if they meet certain criteria, such as owning a home and living there more than six months out of the year.
Gather Necessary Documents
Gathering the necessary documents can be a challenging process, but it is essential to filing taxes correctly.
Tax Forms
To begin tax preparation, seniors must collect copies of important tax forms. Form 1099, for example, is for Social Security Income, and may be necessary for older adults to include. Provide Notice 1444 if you received an Economic Impact Payment during 2020 that has not yet been reported. Those who work still require W2s.
Financial Records
Gathering financial records from the past year will help with calculating deductions and credits. It also ensures accuracy in calculations made during taxes. These records may include things like IRA contributions, income earned through freelance or contracting work, and a statement of investments.
Income Documents
Lastly, make sure all your income sources are accounted for when collecting documents. You may be eligible for certain credits based on how much you made.
Having the necessary documents available at any given time is beneficial should you ever be audited. That's why you must keep records safe for up to seven years.
Understand Tax Changes
Our senior’s guide to tax cannot emphasize enough the importance of staying updated with recent tax law updates. Check the IRS website, the websites of other financial advisors, and online forums. Knowing what credits or deductions you qualify for will ensure you file correctly and receive the most from whatever amount you’re owed in taxes.
Choose a Tax Preparer
Choosing a reliable tax preparer can be tricky. It is crucial to select someone who understands your financial situation. Choose someone who can accurately prepare your taxes. When interviewing potential tax preparers, be sure to ask if they have any experience in retirement planning or handling senior-specific finances.
You can also ask for references from previous clients. Discuss potential costs too. This may include hourly fees or charges based on how complicated your return might be.
Some additional questions that may influence your decision are:
- Are there any special deductions I qualify for?
- Do you have experience dealing with international taxation matters?
- Can you explain the benefit of electronic filing over traditional mail-in forms?
- What payment options does the IRS offer?
You should feel comfortable and confident in the tax preparer you choose.
Contact Senior Helpers Jersey Shore
Tax season is just around the corner, and it's important to get started. Senior Helpers Jersey Shore offers personalized in-home care services for those living in Atlantic City, Egg Harbor Township, Vineland, Mays Landing, Absecon, Bridgeton, and Millville. We understand that filing taxes can be overwhelming for seniors, but we're here to offer assistance with helpful advice and additional services you may require for care. Contact our team today.