tax deductionsMost people know that you can use standard tax deductions to reduce the amount of income on which they are taxed, but most seniors may not realize that you are allowed the standard deduction and any additional standard deduction (a higher amount) calculated for age or blindness. Per IRS definition, the standard deduction is adjusted each year for inflation whether you are 65 years or older, whether you are blind and whether another tax payer can claim you as an independent.

These deductions are designed to help seniors, as many are on some type of long-term health plan and the additional expenses these plans entail. Although they vary state-by-state, there are a few other deductions besides the standard one that seniors can look for.

  • You can receive a credit if you are over 65 years of age and/or if you are on permanent disability. You can receive up to $7,500 with this credit, but if you make more than $17,500, or if you receive more than $5,000 in nontaxable Social Security benefits, pension payments or disability payments you would not be eligible.
  •  

  • If you are elderly and require in-home care so another member of your family can work, you may qualify for the credit classified under child and dependent care. Also, you have the medical expenses deduction, which allows you to deduct expenses that exceed 7.5 percent of your adjusted gross income.

     


    There is also a new bill in front of congress designed to keep older Americans active and healthy. It’s called the Personal Health Investment Today (PHIT) Act, and it would “…Amend the Internal Revenue Code of 1986 to treat certain amounts paid for physical activity, fitness and exercise as amounts paid for medical care.” For example, golf clubs, balls and even camps and clinics are proposed to be tax deductible up to $1,000 for an individual and $2,000 for a head of household or family.

If you have questions about the deductions you may be able to take to help lower your financial burdens going into retirement, we invite you to call Mooney Lyons at 1.847.382.2600, or visit us at mooneylyons.com.

The information in this material is for general information only and is not intended to provide specific tax advice or recommendations for any individual. Please consult your tax advisor regarding your specific situation. Mooney Lyons and LPL do not provide tax advice or services.

References:

Topic 551 – Standard Deduction. IRS. 7, April 2016.
https://www.irs.gov/taxtopics/tc551.html

McMullen, Amanda. Tax Deductions for Over 65 Years Old. ZACKS.
http://finance.zacks.com/tax-deductions-over-65-years-old-6733.html

Shamburger, Michael and Lisk, Jason. The PHIT Act Allows Tax Deductions for Golf and Other Athletic expenses, But Will It Have a Practical Impact? USA Today Sports. 25, May 2016.
http://thebiglead.com/2016/05/25/the-phit-act-allows-tax-deductions-for-golf-and-other-athletic-expenses-but-will-it-have-a-practical-impact/

Tax Help for Senior Citizens. Tax Help. 2016
http://taxhelp.org/resources/senior-citizens/

Investing e-book

X
X