Income tax season can be complicated for people of all ages, from those entering the workforce to new parents claiming dependents for the first time. As a senior, a whole new set of exceptions and specifics will arise. If you’re 65 and over and wondering how you can make the most of your return, take a look at the following three tips.
What Should Every Senior Know Before Filing Taxes?
1. Income Tax Filing Threshold
According to the IRS, individuals don’t need to pay taxes if they make under a certain amount. However, the majority of people exceed this amount. In 2019, it’s $9,700 a year in income for single filers, but for seniors, this threshold is $1,600 higher per single filer. In other words, you might not have to pay taxes at all if you’re retired and 65 or older.
2. Medical & Dental Deductions
As a senior, you may be able to deduct the expenses related to your medical and dental needs, as long as you’re choosing to itemize your personal deductions. This doesn’t apply to seniors taking advantage of the standard tax deduction. If you’re itemizing, you can deduct your Medicare and other health insurance premiums—as well as the cost of your prescriptions and nursing home expenses—if they are over 10% of your AGI.
3. Property Sale Taxes
If you’re 65 or over, you may be considering selling your home and downsizing or moving into a senior living center. Usually, one of the downsides of selling a property is that any profit you make will be taxed. However, if within the past five years you’ve lived in the house for two or more years, then you may not have to pay taxes on the profit. This applies if the profit is under $250,000 for single filers or $500,000 for married joint filers.
If you’re preparing to file your taxes and want some help combing through the details, reach out to Donna Sellers CPA of Brownfield, TX. She has over two decades of experience as a certified public accountant, and she’s happy to help prepare your taxes for 2019. She can also assist with payroll and bookkeeping services. To learn more about her skills, visit the website or call (806) 637-8556 to arrange for a free consultation.