Hi. I’m Connie. As a serial “Grandmapreneur®”, I speak to retirees or soon-to-be retirees on the benefits of pursuing entrepreneurship in retirement. This blog post will help you know more about navigating taxes for seniors, which you will need as you consider starting a business.
Navigating Taxes for Seniors: How to Do Your Taxes Properly
Like everyone else, senior citizens must file their taxes if their income exceeds certain limits authorized by the government. Once you stop working, you don’t have to pay taxes. However, you might need to pay income taxes at the federal or state level. If you don’t know where to start, I got your back. Here’s how to navigate taxes for seniors:
Know Your Rights
If you’re 65 or older, you’re entitled to tax benefits depending on your state. For example, if you don’t itemize your deductions, you might be entitled to a higher-than-average amount than your standard senior deduction. This amount goes higher if you or your spouse is blind.
Another benefit seniors are entitled to is the Care for the Elderly or Disabled credit. As the term implies, you can only avail this if you or your spouse is disabled. In addition, the amount you’ll get is based on your filing status, income, and age.
Be Careful With Social Security
Computing the taxable amount of your social security benefits can be messy.
If you’re doing your taxes, you must carefully complete the social security benefits worksheet. It’s also best if you ask a professional to double-check your work. Take note that if your provisional income is higher than $32,000 annually, you must pay taxes on your social security.
Have Someone Prepare Your Taxes For Free
Are you having trouble computing your taxes? The Tax Counseling for the Elderly (TCE) got your back. This service is for taxpayers 60 years or older.
Under the TCE, IRS-certified volunteers will review your taxes with you and help you with everything until the final filing. The volunteers also know about tax issues like pensions. Additionally, the IRS website has a useful locator that looks for a TCE representative near you.
Beware of Scammers
Scammers take advantage of a lot of things, including natural disasters, holidays, and other occasions, to prey on innocent people, especially seniors.
Hence, you must remember that the IRS and other agencies don’t usually contact you through text, email, or call to ask for personal information.
If you or a loved one has received spam calls, hang up right away. If they call, hang up again. You should also never give them personal information, no matter what. Remember, scammers pretend to be someone high up on the ladder, so you’ll do what they want.
Start Preparing for Next Year
Begin preparing for next year by organizing everything. Put your tax-related documents in one place and make your electronic records easily accessible. Doing this will save you a lot of stress when tax season comes.
Conclusion
While nobody truly enjoys paying taxes, it’s a must. By properly managing your assets and income during retirement, you can take advantage of tax benefits. Plus, if you don’t know the ins and outs of your financial situation, I suggest you consult a tax professional before making any decisions.
