Did you know that tax credits exist to help retirees save on their tax bills? The Internal Revenue Service (IRS) offers several options for seniors.
Tax Breaks for Retirees and Older Adults
Here are a few examples of tax breaks you may not have thought of.
Charitable Contributions
This is a deduction potentially available to anyone, but seniors and older adults are often generous donors. When you make a charitable contribution, be sure to document it and ask for a receipt from any organization to which you donate. Even small donations can add up.
Credit for the Elderly or Disabled
You can take advantage of this tax credit if you or your spouse is over 65 or if either of you is permanently and totally disabled. To see if you qualify, read more here from the IRS.
Caregivers and Dependents
There are tax breaks available if you are a caregiver for an older adult or a disabled person. There are also tax breaks for grandparents and others who care for small children. Here are resources from the IRS to learn more about some of the credits that may be available to you if you find yourself in one of these categories:
Homeownership Deduction
Being a homeowner offers a number of tax breaks. Retirees who are still paying on a mortgage can deduct the interest at tax time.
IRA Contributions
There is no longer any age limit for contributing to a traditional or Roth individual retirement account (IRA). If you are bringing in income during retirement, you are still allowed to contribute to a traditional IRA and may be able to get a tax break because of that.
Business Expenses
Some retirees still run their own businesses. You can deduct eligible expenses related to your business. These can include items for your office such as printers, fax machines, computers, laptops and tablets, office supplies and more. You may also be able to deduct for marketing and advertising, education and training, travel and other expenses.
You may also qualify for health insurance and premium deductions if you own your own business. Check here to see if you qualify for Medicare and insurance savings at tax time.
Final Thoughts
An important final tip: Check to see if you qualify for IRS Free File. If you’re not eligible, here are several other ways to file your taxes for free.
Finally, you can learn more about credits and deductions from the IRS here.
