Most people feel like pulling their hair out when tax season rolls around, but taxes can be especially confusing for seniors, many of whom receive most of their income from non-taxable sources. Many seniors are unsure if they need to file a tax return if they receive Social Security income, and you may see a lot of conflicting advice. Here are some tax tips from El Dorado County Home Care Assistance to make this year’s tax season a little easier.
1. Seniors are eligible for a higher standard deduction
Seniors who do not itemize their deductions are eligible for a higher standard deduction. If you or your spouse are 65 or older or if you or your spouse is blind, you can take a higher standard deduction of $7,750 if your status is single or $14,800 if you’re filing jointly. This compares to $6,200 for single filers and $12,400 for married people under 65.
2. Seniors have a lower medical expense threshold
Taxpayers under 65 can only deduct medical expenses if they exceed 10 percent of their adjusted gross income. Seniors can deduct medical expenses that exceed 7.5 percent–even if only one spouse has reached 65. This has the potential to dramatically lower taxable income and adjusted gross income as most seniors have high medical costs. Covered medical expenses include hospital bills, doctor bills, the cost of prescriptions not covered by insurance, prescription eyeglasses, hearing aids, wheelchairs, dentures, and premiums for Medicare and other forms of coverage. Even premiums paid for qualified long-term care insurance can be deducted.
3. Some Social Security benefits are taxable
Many seniors assume they do not need to file if they receive Social Security benefits, but some of the benefits may be taxable. How much of the benefits are taxable depend on the amount of the benefits received plus other income. The more income a senior has, the more likely some Social Security benefits are taxable. The good news is no one pays federal income tax on more than 85 percent of Social Security benefits. The IRS says it’s important to be careful when calculating the taxable amount of benefits and to double-check the figures.
4. Seniors may be eligible for a credit for the elderly and disabled
If you are 65 or older, retired on permanent and total disability, or have taxable disability income, you may be eligible for the Credit for the Elderly or the Disabled. This credit has income restraints, but it can be worth $3,750 to $7,500.
5. Free help is available
Many community organizations offer free tax services for seniors, and the IRS offers free programs. The Tax Counseling for the Elderly (TCE) program offers free tax assistance to people aged 60 and older at over 7,000 sites across the country.
Discover additional resources that can help your senior loved one maintain a healthy, happy life through Home Care Assistance. We offer El Dorado County respite care, live-in care, and part-time care, ensuring seniors have support whenever they need it. Our caregivers run errands, provide transportation, offer medication reminders, prepare healthy meals, and much more. Give us a call at (916) 358-3801 or (530) 409-4411 to learn more about how our care services can benefit your senior loved one.