American Investment Planners LLC
500 North Broadway, Suite 260, Jericho, NY 11753
(516) 932-5130 / (866) 932-5130
Things change as we get older - it's inevitable - and a lot of those changes require careful planning so that we're ready to take on whatever situation or circumstance comes our way. From where we'll live to who will care for us and how we'll support ourselves without a steady paycheck, there's a ton to go over! For us, a major topic is tax planning - how does the process of filing a tax return change once we hit retirement age and beyond? Find out below.
If you and/or your spouse are 65 years of age or older, you can be eligible to receive a higher standard deduction amount if you don't itemize your deductions. Furthermore, if you or your spouse have vision troubles and are considered blind, you may be able to receive an even higher standard deduction amount than others. Just ask your financial planner - they'll be able to see what you qualify for.
The Credit for the Elderly or Disabled:
This credit is handed out based on a number of factors, including age, income and filing status. Where age is concerned, you and/or your spouse must be 65 years old or older, OR, if you have not reached age 65 yet, you and/or your spouse can qualify if you are completely disabled.
In addition to meeting the age qualifications, you must also meet the following where filing status is concerned: the income on line 38 of your 104o Form must be less than $17,500, $20,000 (when you are married and filing jointly with only one spouse who qualifies), $25,000 (if you are married and filing jointly and both of you qualify), or $12,500 (if you are married but filing separately and you have not lived with your spouse for an entire year).
Regarding filing status, you'll also need to meet the following to qualify: the non-taxable part of your Social Security or other nontaxable pensions, annuities or disability income must be less than $5,000 (if you are single, the head of household, or a qualifying widow/er that has a dependent child), $5,000 (if you are married and filing jointly but only one spouse qualifies), $7,500 (if you are married and filing jointly and both of you qualify), or $3,750 (if you are married but filing separately and you have not lived with your spouse for an entire year).
For more details about the qualifications for this particular credit, check out this article from the IRS.
The Taxable Amount of Social Security Benefits:
Once you begin receiving your Social Security benefits, you'll need to take them into consideration when preparing a tax return. As you do so, you can use the Social Security benefits sheet found in IRS Forms 1040 and 1040A to find out how much of your Social Security income can and should be labeled as taxable. Of course, your financial planner can help you with this as well to ensure that no mistakes are made.
In addition to the above, senior citizens should also know that there are IRS-sponsored volunteer tax assistance programs available that offer FREE tax help to seniors who cannot prepare a tax return on their own. Of course, though, if you have a family financial planner that you have worked with on things such as retirement planning and estate planning, turn to them first as they already know your current financial situations well enough to help you prepare.
We at American Investment Planners LLC pride ourselves on being a financial planner for the whole family, which is why we want to help everyone - children, young adults, parents, grandparents, even great grandparents - with their taxes. To learn more about our tax planning services, please give us a call at (516) 932-5130 today.
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