Senior citizens are entitled to a number of benefits, many of which have been earned through years of professional employment and fiscal contributions to the federal government. When it comes time for filing taxes, there are a variety of senior citizen tax deductions that can help you minimize your tax obligations and ensure a happy, stable retirement.
Claiming Your Tax Breaks
As a senior citizen, you may be surprised to learn how many tax breaks and deductions are available to you. Not only are standard expenses such as medical and dental costs often deductible for senior citizens, but also any contributions made to retirement plans such as an IRA or 401(k).
When it comes to retirement plan contributions, it is important to remember that individuals over the age of 50 receive higher limits on contribution amounts to IRAs and other retirement plans. Because of this, it is possible for senior citizens to claim larger deductions if they have opted for this expanded contribution size. That being said, the federal income tax on pensions will still apply in situations where senior citizens contributed pre-tax income to their employer plan or didn't contribute directly.
Assuming you have invested throughout your lifetime, you can continue to deduct any and all expenses associated with these investments, such as fees paid to financial planners, brokerage firms. etc. In any situation where these fees can be properly documented, it is quite likely that they can be deducted.
Using the Standard Deduction
It is quite important to mention that the standard deduction on income tax returns is also age sensitive. For example, when taking the standard deduction over 65 years of age, you will have the opportunity to deduct more income then you have previously. For example, in 2018 if you are a single filer over the age of 65, you'll get a standard deduction of $13,600 verses the $12,000 for individuals under the age of 65. This represents one of many opportunities to lower your annual tax burden using standard deduction opportunities granted to senior citizens.
Filing Your Taxes
Senior citizens can use IRS Form 1040 to file their taxes and itemize any all deductions, assuming they choose not to utilize the standard deduction rates mentioned previously. If you are required to report capital gains profits or losses, you can accomplish this using Schedule D of IRS Form 1040. If you have any additional questions about the filing process, you should consult with a tax professional, as they individuals can help you complete your tax return and avoid any penalties or fines.
Ryan Cockerham is a nationally recognized author specializing in all things innovation, business and creativity. His work has served the business, nonprofit and political community. Ryan's work has been featured at Zacks Investment Research, SFGate Home Guides, Bloomberg, HuffPost and more.