Start Planning Now! A Senior's Guide to Tax Season 2023
Tax season can be stressful for seniors and is often a source of confusion. Making mistakes in filing taxes as a senior may result in audits or even costly fines, so it's best to plan ahead if possible. In order to take the stress out of tax preparation, we've provided this simple guide that outlines how seniors can prepare for 2023 tax returns in advance.
Why Plan Ahead for Tax Season?
Tax planning is important for seniors who wish to minimize taxes and maximize benefits. It allows seniors to get updated on their tax break strategies and saves money with deductions, credits, exemptions, and other incentives. When you plan ahead, you can better anticipate your financial burden, stay organized while preparing documents, accurately file returns and avoid mistakes.
Tax Benefits for Seniors
Tax benefits created specifically to help seniors can make a world of difference in income taxes. These deductions, credits, and exemptions are designed to offset the cost of living for seniors who have likely retired.
Deductions
The deductions detailed in a senior's tax return can ultimately cut the amount of taxable income down. Deductions for seniors could include expenses related to medical bills, charitable donations, interest payments on a mortgage or student loan, and various other items that are tax deductible.
Credits
Credits are used to subtract the amount of taxes a senior owes. Some credits target seniors, such as retirement savings contribution credits, returns of premiums on health care insurance policies, and additional benefits specific to aging individuals.
Exemptions
Like deductions, exemptions help to reduce the amount of taxable income reported on a tax return. Common exemptions among seniors include social security, pensions and 401K distributions, disability retirement payouts, and unemployment compensation.
How to Prepare for Filing Taxes
Preparing will make filing your taxes easier and maximize credits, deductions, exemptions, and other tax-related incentives. Here are a few steps that can help with tax planning for seniors.
Gather Necessary Tax Forms
The most important step in tax preparation is making sure you have all the proper documents. Start by gathering all previously submitted returns, income statements, medical bills, social security payments, estate or trust documents, and other relevant financial paperwork.
Keep Accurate Records
Documentation is key when it comes to filing taxes accurately. Keeping necessary records handy while preparing your tax return can help you make sure that you are claiming all the credits and deductions due to you as a senior.
Stay Organized
With all the paperwork and forms that need to be organized for tax preparation, it helps to stay on top of a good filing system. Keeping different subjects separate in labeled folders can go a long way toward keeping track of important documents needed.
Seek Professional Assistance
Seeking professional assistance is often the smartest move when it comes to filing taxes. A certified tax preparer specializing in seniors' tax returns can help you maximize deductions, credits, and other financial options available to seniors.
Senior Helpers Offers Unique In-Home Care Options
Senior Helpers is here to provide personalized in-home care and support for seniors all year round—not just during tax season. With a variety of services from providing medication reminders to offering emotional support, Senior Helpers is your source for compassionate and dependable care. Contact us today to learn more about the services we offer in Arlington, Alexandria, Falls Church, and Fairfax County.