Top 6 Tax Saving Ideas For Retirees

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In the twilight zone of our life, what we need the most is peace of mind. Peace from financial liabilities and enough income to see us through comfortably. You also have to pay taxes on your income. But we will not like to pay much taxes at this point in time. When you avail services of a professional who files your taxes, you are not only free from the burden of tax filing but also assured of paying fewer taxes and getting a refund on deducted taxes. The professional tax service providers have better ideas to get your deductions and tax refunds.

We will go through some of the methods employed by professional tax filing service providers and see how they cut corners to save your much-needed money.

Elderly getting tax credit

IRS elderly tax credit is for anyone above the age of 65 years. Though its nonrefundable and thus does not bring you refunds, what it does is that it reduces your tax liability.

Itemized or standard deduction

You have to decide for yourself whether the itemized tax deduction is less or more. Since most liabilities are done by the time you reach 65. For example, in case of mortgage interest, you will have fewer deductions to make. If the itemized tax deduction is less than $6,550, then it is better to go for the standard tax deduction. Since, for elderly, the standard deduction provided by IRS is more, it’s beneficial for you to go for it. If your itemized deductions are considerable and can give you the better tax deduction, then opt for that.

Retirement home

If your plan is to move into a retirement home or you want to move into a smaller property, then you can sell your home and save tax on the profit made on it. The tax break limit for the single taxpayer on profit is $250,000 and for a joint taxpayer is $500,000. If you want to stash money in your bank account, then this will be a good idea.

Medical expenses

As you age, your medical and dental bill also grow. If your medical bill is substantial, then it will be wise for you to go for itemized deduction. For those above 65 years, you can claim a deduction for a medical bill for any cost above 7.5% of the gross adjusted income.

Charitable contribution

You would have of late thought of giving some of the money you earned to charities. This soulful thought is good as the IRS gives a deduction for your noble intentions. A charitable deduction is applicable only if you have itemized your expenses. You can also avail charitable deduction on mileage if you have to travel to charity. So your last mile also makes you smile.

Expenses towards your business

tax filing online

In case you thought of starting your own business or want to do some consultancy at a ripe old age of 65 years, then why not. You can always get a deduction from your home office and also can get a write-off on some of your expenses and that too without itemizing.

You definitely now have an idea on how to get a benefit on tax filing and tax refund. Get your professional tax service provider, let him fill the tax form and do the IRS tax filing. The not only better tax rate will be used but a better tax refund is insured. Peace of mind will be restored.

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