It's that time of year when retirees in the USA have to file taxes.
If you are lucky, you can file a short form and be done with it for another year.
Many more retirees have to pour over their income records, receipts and find a tax preparer.
Simply one of those things that most retirees would prefer to avoid if they could.
I hope this page helps you with your tax preparations.
As we age, seniors have more medical expenses
-- possibly enough to itemize your deductions on Schedule A. Some seniors pay as much as 30 percent of income to health care costs, sometimes more.
If you have lots of medical bills, there are many deductibles you might include. For example, check out the long list of deductibles below. Other deductibles are your health insurance premiums (including Medicare premiums), long-term care insurance premiums, prescription drugs, nursing home care and most other out-of-pocket heath care expenses.
The IRS provides a long list of medical expenses that are deductible. There is a long list below, but even more here in the IRS Publication 502, Medical and Dental Expenses.
You must include only the medical and dental expenses you paid this year, regardless of when the services were provided. Of course, all these medical costs are only deductible if you paid them. If the insurance company paid the bill, it wasn't your expense and thus isn't deductible.
Medical and dental expenses must exceed 7.5 percent of your adjusted gross income (AGI) in order to qualify for a deduction in 2012. In 2013, this increases to 10 percent, making it more difficult to qualify next year.
Single people over 65 can claim $1,450, while married people can take an extra $1,150 for 2012. You can also claim the higher deduction if only your spouse is older than 65 and you file a joint return.
You qualify for a higher standard
deduction if you are totally or partially blind. The definition of "blind" is that you do not have
corrected vision of at least 20/20 or you have an extreme limitation in
your field of vision.
You may be able to include investment-related expenses (investment advice, fees for a safe deposit box, subscriptions to investment newsletters, etc.) that exceed 2 percent of your adjusted gross income in your other itemized deductions.
If you sold your home, you may not have to pay taxes on any profit made from your home's sale if you lived in your home for at least two of the five years prior to selling it.
Tax laws allow a single
filer to claim, with no taxes, up to $250,000 in profit on a home sale,
and up to $500,000 for a married couple filing together.
IRS rules state that the maximum you could pay on your Social Security benefits is 85 percent Federal tax.
The Social Security website advises that if you file either an individual or joint return, and your combined income (your adjusted gross income plus nontaxable interest plus one-half of your Social Security benefits) is:
Income (see above)
$25,000 - $34,000
Possible SS Taxed
Pay taxes on up to 50% of your benefit
Pay taxes on up to 85% of your benefit may be taxable
In January, you receive a Social Security benefit statement
(Form SSA-1099) showing the amount of benefits you received in the
previous year. If you do have to pay taxes on your Social Security
benefits, you can make quarterly estimated tax payments to the IRS or
choose to have federal taxes withheld from your benefits.
You can find free help through AARP - Tax-Aide is a free tax preparation service for people 60 and
older with low to middle incomes.
In 2010, about 35,000 Tax-Aide volunteers prepared 2.6 million tax returns at thousands of locations across the country. The software allows preparers to file electronic federal and state returns free of charge.
Most cities offer free assistance (subject to income limits) through Volunteer Income Tax Assistance programs.
I hope this helps you!