As your elderly parents move closer to retirement, it's essential to help them navigate tax filing season. By taking the necessary steps now, you can ensure that your elderly parents can enter the 2023 tax season as prepared as possible. With changes like the Tax Cut and Jobs Act (TCJA) going into effect, it's important to plan ahead and be prepared.
Reasons to Start Financial Planning Now
Nobody likes doing their taxes. It's a stressful time each year, but it only becomes more stressful if you put it off until the last minute. In the case when you're managing the finances of family members, it's even more important to start planning early. Here are just a few reasons why and some things to watch out for:
Tax Law Changes
The tax laws have changed significantly over the last few years, and they are continuing to change. Stay up-to-date with all of the changes so that your elderly parents are able to maximize their tax deductions.
Available Deductions
Many tax deductions are available to seniors that are not available to other taxpayers. As your elderly parents plan for 2023, they should discuss available deductions with their tax professional. From elderly or disabled tax credits to social security tax exemptions, it's possible there are more opportunities for your parents to save on taxes.
Retirement Planning
Retirement planning can be a difficult process for seniors. Unfortunately, many elderly individuals do not understand their retirement options and cannot make the most of them. Understanding the available retirement accounts will make it easier to review your parents' goals for the future.
Insurance Planning
Insurance planning is essential for seniors who are considering long-term care costs. It is important to review the available insurance options and make sure your elderly parents understand the benefits and drawbacks of each one.
Steps to Take Now
You can get started with four steps.
- Gather Financial Documents: Gather all of the documents related to your elderly parent's finances, including tax returns and banking information. Having these documents handy makes it easier to review their financial plans and make the necessary changes.
- Create a Budget: An accurate budget will help your elderly parents stay on track with their financial goals. Be sure to review their budget regularly to ensure that it is up-to-date and relevant.
- Consider Long-Term Care Costs and Insurance Options: Long-term care costs can be quite expensive, and it is important to consider insurance options to help prepare for them. Discuss the available long-term care insurance options with your elderly parents and make sure they understand the cost and potential benefits.
- Review Investment Strategies and Possible Changes: Review any current investment strategies your elderly parents might have and offer advice on ways to adjust their strategy to ensure their retirement goals are met.
Once you've collected all the pertinent information, the final step in the process is to meet with your parent's financial advisor. Unless you are an accountant yourself, getting help from a professional is highly recommended when navigating the territory of changing tax law and long-term budgeting, especially if your parents are living on a fixed income.
You Help with the Finances, We'll Help with the Rest
Financial planning is an essential part of preparing for retirement and can help ensure that your elderly parents make the most of the 2023 tax season. While you're focused on helping get your parents' finances ready for tax season, let the team at Senior Helpers Blue Ridge handle in-home care, appointments, and general support. We're here to help families living in Charlottesville, Winchester, Warrenton, and the surrounding areas. Contact Senior Helpers Blue Ridge today to get in-home senior care that can help ease the load of caring for elderly family members.