How ready are you for tax season this year? It’s a very important time of year for seniors, caregivers and their loved ones. However, tax season can be a stressful time for many Americans, including seniors. Unexpected financial troubles might pop up. You might end up owing the government money. And for many seniors, there is also the lingering fear of fraud or identity theft.
How can you protect yourself? If you are a caregiver, how can you protect your loved one(s)?
Being prepared for tax season is key to reducing hassles and worries. Here are some tips for managing the tax filing process and any stressful money moments as they pop up:
Know when to file (or not file)
Anyone who is unmarried and at least 65 years old must file income tax if he or she has a gross income of $11,850 or higher. For married couples above age 65 who are filing jointly, the gross income limit raises to $23,100 or higher. For seniors, however, if you live on Social Security Income (SSI), you do not have to include SSI in your gross income.
Take advantage of the senior tax credit
Did you know the IRS offers a special tax credit for seniors? The credit ranges from $3,750 to $7,500 and can greatly help elderly individuals who owe money to the government this year.
Avoid the scams
Unfortunately, there are fraudulent individuals who prey upon the elderly during tax season. One of the best ways to protect yourself is by knowing the signs of a scam. The most common scams directed towards the elderly during the 2016 tax season involved phone calls about fake charity donations, political endorsements, or outstanding bills. Never provide sensitive information to suspicious callers. The IRS will never call you to collect a payment, and will never ask for your bank account, credit card or debit card information.
Lower the Amount You Owe
Obviously, the more you can do throughout the year to lower your taxes, the better off you’ll be during tax season. Maximizing deductions and tax credits, donating to charities, and even paying your medical bills can all help you reduce the amount you owe the government this April.
Hire a professional
If the tax preparation process feels overwhelming, you might want to consider hiring a professional to help you prepare your taxes. There are a few tips for avoiding scammers here. First, hire only those professionals who are highly ranked with the Better Business Bureau. Second, consult with Consumer Reports if needed. Third, seek respected resources like Certified Public Accountants (CPAs) or well-known national tax preparation chains. Low-income seniors might even be able to qualify for free tax preparation through a volunteer service like AARP TaxAide.
These are just a few pieces of advice that can hopefully reduce stress during the upcoming tax season. By being proactive and taking a few steps now, you can hopefully make your next tax season hassle-free.