February 28, 2024

What Seniors Should Know Before Filing Their Taxes

About Nicole Pajer

Nicole Pajer is a Los Angeles-based freelance published in The New York Times, Woman's Day, AARP, Parade, Wired, Glamour, People and more.

Tax season is upon us once again and the deadline of April 15th is looming. But before you get ready to prepare your paperwork, here are a few helpful things that experts want you to know.

The basics

The earlier you file, the earlier you’ll likely receive your tax refund

Don’t want to sit around and wait forever and a day for your refund to come? When it comes to filing, the early bird gets the worm. Generally it works out that the earlier you file, the earlier you’ll get your refund.

Standard deductions

“If you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older,” says Moira Corcoran, a CPA and JustAnswer Tax Expert.

You may also get an even higher standard deduction amount, she says, if either you or your spouse is blind.

Per the IRS Publication 17 Your Federal Income Tax (For Individuals), if you are not totally blind, you must get a certified statement from an eye doctor that says that:

You can't see better than 20/200 in the better eye with glasses or contact lenses, or
Your field of vision is 20 degrees or less.

If your eye condition isn't likely to improve beyond these limits, the IRS notes that the statement should include this fact. You’ll also want to keep these statements with your tax records.

Taxable amount of Social Security benefits

The taxable part of your benefits usually can’t be more than 50%. However, up to 85% of your benefits can be taxable if either of the following situations applies to you.

The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly).
You are married filing separately and lived with your spouse at any time during 2023.

“If you are married and file a separate return, you probably will have to pay taxes on your benefits,” adds Corcoran.

Consider your eligibility for credits for the elderly or disabled

“Credits are based on your age, filing status and income,” says Corcoran. She notes that you may be able to take certain credits if:

Qualifying Individual: You and/or your spouse are either 65 years or older; or are under age 65 years old and are permanently and totally disabled, received taxable disability income for 2023 and on January 1, 2023 had not reached mandatory retirement age; and
Income Limits: You do not exceed certain income limits.

Paul Miller, Managing Partner & CPA, Miller & Co., LLP., also says that before filing, seniors should keep the following in mind:

Know Your Income Sources: Identify all income streams, including Social Security, retirement distributions, and part-time work.
Maximize Deductions and Credits: Take advantage of deductions that apply related to your medical expenses, property taxes, and charitable contributions, along with credits like the Elderly or Disabled Tax Credit, if applicable.
Stay on Top of Required Minimum Distributions (RMDs): Understand RMD requirements for retirement accounts to avoid inadvertently incurring penalties.
Track Healthcare Expenses: Keep records of deductible healthcare expenses, such as Medicare premiums and out-of-pocket costs.
Check State Tax Rules: Be aware of state tax laws, as they vary, and look for potential senior-specific tax breaks that may apply.
Choose Your Filing Option Wisely: Decide whether filing independently, jointly with a spouse, or with professional help suits your situation best.
Manage Retirement Contributions: Determine if you're eligible to continue contributing to retirement accounts and understand the tax implications.

^{The above content is shared for educational and informational purposes only. The content is not intended to be a substitute for professional legal or financial advice or counseling from an attorney or financial advisor and should not be relied upon for making legal, financial, or other decisions. Never disregard professional legal or financial advice or delay in seeking it because of something you have read on our site. Please consult your attorney or financial advisor before acting on any content on this website.}