Tax Tips for Senior Adults
on February 15th, 2021 in Acworth Ga, Alpharetta, GA, Dunwoody, GA, Grayson | No Comments
Your Top Senior Living Facility in Dunwoody, GA Talks about Tax Tips for Senior Adults
The tax season is here and you are wondering what kind of tax deductions are available for your elderly loved ones as well as a caregiver like yourself. Or maybe you have been trying to navigate all the free tax preparation services of which your loved ones can take advantage. As one of the best communities when it comes to senior living in Dunwoody, GA, we understand that it can be overwhelming balancing tax preparation and caring for loved ones. That is why we have put together a list of tax tips for senior adults that you may find useful.
Tax Preparation Tips for Seniors
Standard Deduction for Seniors
The first thing to keep in mind is that your loved ones cannot take standard deductions if they choose to itemize their deductions. According to the Internal Revenue Service (IRS), besides the basic standard deduction, if your aging loved ones are 65 or older, they are also allowed an additional standard deduction. On top of that, their standard deduction can be higher if they are blind.
For more information, we encourage you to read the instructions for Form 1040 and 1040-SR.
Tax Credit for Elderly or Disabled Individuals
This tax credit is available to people who are 65 or older. However, to receive the tax credit as a disabled individual, one must be retired permanently and be in total disability. The credit is in the range of $3,750 to $7,500. In terms of eligibility, your loved ones’ qualifications will be determined based on their age, adjusted income, filing status, taxable income, and pensions. They can also take this online interview to see if they are entitled to this type of credit.
Deductions for Medical and Dental Expenses
Unlike the standard deduction, tax deduction for medical and dental expenses is only applicable with itemized deductions on Schedule A. According to the IRS, the medical expenses include “payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.” Another thing to notice is that your loved ones can only deduct unreimbursed medical and dental expenses that exceed 7.5% of their adjusted gross income. Wondering which of your loved ones’ medical expenses are deductible? Read more on Topic No. 502 Medical and Dental Expenses.
What If You Claim Your Parents as a Dependent?
Here are some criteria that you and your senior loved one need to meet so that you claim them as your dependent:
- Your loved one must not have earned or received more than the gross income limit set by the IRS (For 2020, the limit is $4,300.)
- Your loved one must either be a resident or citizen of the United States OR a resident of Mexico or Canada.
- You must pay for more than half of their household expenses. Your financial support can involve food, medical and dental care, clothing, recreation, etc.
- Your loved one cannot file their tax returns jointly with their spouse.
Be sure to make use of the Worksheet for Determining Support. It can be a great resource when you are looking to claim your parent or relative as your dependent.
Free Tax Filing Services
- IRS Free File – The IRS Free File allows you to prepare and file your federal income tax for free if your income is below $72,000. If it is above that amount, you can make use of the Free File Fillable Forms.
- AARP Foundation Tax-Aide – This aide program has more than 5,000 locations across the country. It provides in-person and remote tax assistance free of charge to anyone, especially those “who are 50 or older or who have low to moderate income.”
- IRS Volunteer Income Tax Assistance (VITA) – VITA is staffed by IRS-certified volunteers. They focus on taxpayers with an income of $56,000 or less. They also extend their services to people with disabilities and people with limited English language skills.
- Tax Counseling for the Elderly (TCE) – TCE is available to those who are 60 or older and in need of tax counseling or tax return preparation services.
Dogwood Forest – Your Trusted Senior Living Community in Dunwoody, GA
As overwhelming as the tax season can be, with the right tools and resources, we believe that you and your aging loved one will glide through it without any issues. While you try to figure out the best tax filing options for yourself and your loved one, count on us to give them the best care that they deserve. With locations in Dunwoody, Atlanta, Grayson, and Acworth, Dogwood Forest is ready to help during your time of need.
For more information, Contact us today to learn more about our assisted living communities and our services. You can also give us a call at 770-350-7833 – we look forward to bringing you and your loved ones on a new journey with us!