Tax Help for SeniorsTax Help for Seniors

Count your blessings, and Uncle Sam will count them, too. It’s the time of year for Americans to file income taxes, so let’s look at what is necessary. Some senior citizens don’t know if they have to file taxes. One client thought that retirees were exempt from filing taxes. Not so.

Quite a lot of your Social Security benefits can be taxed but only if you have a lot of other income such as pensions, retirement accounts, investments, part-time work or other income source. Any income may be taxable. But it’s not all bad news – there are some special advantages to being 65 or older. You may even be able to utilize tax deductions for assisted living so be sure to check into those as well. 

Whether your Social Security benefits are taxable depends on your marital status. And it depends on the amount and source of your income. In general, if Social Security benefits were your only income for 2014, your benefits are not taxable. In this case, you probably do not need to file a federal income tax return.

There is a higher standard deduction for seniors, but only if you don’t itemize your deductions. You will get a higher standard deduction if you or your spouse are 65 years old or more.

In addition to the higher senior citizen standard deduction, you may also qualify for the Credit for the Elderly or Disabled. But this tax credit is only helpful when you actually owe tax money to the IRS. You must file using Form 1040 or Form 1040A to receive the Credit for the Elderly or Disabled, not Form 1040EZ. But as long as you are at least 65 years old and your income from sources other than Social Security is not high, then the tax credit for the elderly or disabled can reduce your tax bill.

IRS guidelines say that as a rule if you qualify for any of the following credits, then you must file a return to get the refund:

  • If income tax was withheld from your pay
  • First-time homebuyer credit
  • Obama-care health coverage tax credit
  • Earned income credit
  • Any child tax credits
  • Refundable credit for prior year minimum tax
  • American opportunity credit

But it’s usually worth a little paperwork to get some money in your pocket. Many seniors rely on their Social Security for living expenses. Generally, if Social Security benefits were your only income for 2014, your benefits are not taxable and you probably do not need to file a federal income tax return unless you want to receive one of these credits.

Life events change the way you file, and often for seniors it is the passing of a spouse. You may already know this, but the government allows you to file as “married” for the year that your spouse died. Though, the next year you would then need to file based on your updated marital status, i.e. if you have remarried or if you are single.

Another interesting fact to note is the change in income if your filing status changes. Sometimes couples did not need to file based on income, but if there is a significant change in income when the spouse passes away there would be a reason to take another look at whether or not you are required to file taxes now.

If you use an accountant, then it is time to collect any papers that you have not yet provided. You’ll need a 1099 form from Social Security and from your job if you are employed. Also needed are reports from your bank, financial advisor, credit union or other financial institution. Many large corporations have 1099s for their employees available online. Check your company newsletter or ask your manager. You will need a 1099 for each job you have worked during the year.

There are a variety of income and property tax benefits available for senior citizens and retirees. Be sure to investigate those which you qualify for and the state income tax benefits for seniors, too.

Some good news: Free IRS tax return preparation is available.

IRS-sponsored volunteer tax assistance programs offer free tax help to seniors who cannot prepare their own tax returns.

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3 Comments

  1. Janet B. Kovatch March 26, 2015 Reply

    I live in an independent living center due to my disability from bilateral cerebrovascular aneurysms rupturing in 2009. I collect disability from my former employer and social security disability. I have heard that a portion of my rent here at the Holiday independent living facility could be written off but my husband (who still lives in our home) and works says that this is not true. Can you provide any information on my situation and income taxes. I live in Arlington, Texas.
    I would appreciate any information you can provide.

    • Amelia Willson March 27, 2015 Reply

      Hi Janet, have you spoken with the director of the facility? They may be able to help clear things up. Additionally, you may want to speak with an accountant or financial advisor who would be familiar with the tax laws in your state.

  2. Lisa Branley March 6, 2017 Reply

    This was an awesome and helpful article.Thank you very much to everyone who contributed their advice and knowladge.

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