Seniors who are in the midst of calculating and filing their taxes in 2018 can benefit from getting the largest refund possible. Retirees living on fixed incomes cannot afford to pay more than their share in taxes. No matter how old they are, if seniors have any incomes, the Internal Revenue Service is going to want their cut. This income can come from social security payments, retirement accounts, investments, pensions, and part-time work. Seniors who are married, over 65, and filing jointly do not have to file if their adjusted gross income is less than $25,000. Otherwise, the IRS wants to hear from you. These are other rules can be confusing for seniors who are not sure about the tax filing process. Read more to find out what seniors should know about filing their taxes in 2018.
If they don't have itemized deductions or otherwise complicated financial situations, most seniors can use forms 1040 or 1040A. These can be downloaded from the IRS website for free, along with other helpful information.
If taxes are being withheld, this can mean a return instead of owing the IRS once April 15th comes around. Plus, the IRS can charge a fine on top of what you owe for underpaying taxes. Check the benefit statement and make sure taxes are being withheld so you can correctly report it on your return.
This isn't a simple answer and depends on a range of factors, including filing status, the number of dependents, personal exemptions, additional sources of income, and the amount of retirement payments you receive. Not withholding enough can result in back taxes, so it might be worth consulting a professional.
For seniors who are 65 or older, it might be worth taking the standard deduction, especially if there are few itemized deductions available to you. Form 1040 and 1040A have guidelines to help seniors choose which deduction option may be right for them.
It is always a good idea to apply for a tax credit if you qualify. The Credit for the Elderly and Disabled is easy to apply for and can save seniors a lot of money in taxes.
Seniors 65 and older may be eligible for the Credit for the Elderly or Disabled. Line 38 on Form 1040 must be less than $25,000 (married filing jointly) and non-taxable income must be less than $7,500.
Seniors who have an uncomplicated financial situation, such as few non-taxable payouts per year and social security benefits, may not need to hire someone. However, seniors who have accumulated a lot of wealth and assets may find that they benefit from professional tax preparers.
Seniors in the low- to mid-income rage may be eligible for free tax help through two programs: the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE). The VITA is for seniors who make less than $50,000, while the TCE program is for those 60 and older who have questions or may need someone to simply look over their tax forms.