You may think that once you retire, filing your taxes will be a lot easier. Unfortunately for retirees, the opposite may be true—they face new tax hurdles, like reporting different sources of income and handling a new set of deductions. Linda Shiraiwa M. CPA, PS Inc., a tax education expert located in Gig Harbor, WA, answers some frequently asked questions about taxes for retirees.

Tax Education For Retirees

What Are The Biggest Changes After Retirement?

The biggest change for many seniors after they retire is a change in their tax bracket. Most retirees have a drop in income, which moves them to a lower tax bracket. Although they may only receive retirement plan distributions and Social Security payments as income, they will probably still need to file a tax return.

What Are The Tax Advantages To Being Retired?

One of the biggest tax advantages for seniors is that many pay less in taxes due to a lower tax bracket. Retirees are also able to withdraw money from their retirement accounts without facing penalties for early distribution.

Are There Tax Disadvantages To Retirement?

The main tax disadvantage retirees face is that the pre-tax money they saved over the course of their careers is subject to taxes in retirement. If taxes are not paid on this money, the IRS can make seniors pay penalties.

How Can I Maximize My Tax Return In My Retirement Years?

Consider working with a retirement plan or tax education specialist to ensure you are maximizing your tax returns each year. The experts can help you make sure your taxes are completed correctly while maximizing your allowable deductions.

Linda Shiraiwa M. CPA, PS Inc. is a tax education and bookkeeping expert who provides businesses and individuals with expert accounting services. Give her a call at (253) 858-6030 or visit her website to learn more about the accounting services she provides.