April showers bring May flowers, but they also bring the end of tax season. As you are preparing to file this year’s taxes, it may be helpful to know that there are many potential benefits for those age 65 and older. Managing your money wisely is important, especially if you’re on a fixed income. That’s why we’ve created this list of ways to ensure your tax process goes smoothly this year.
Please note that our team is not here to offer official tax or financial advice, but rather to provide information that you can use to maximize savings yourself or with the help of a trusted tax professional.
How Do I Maximize Deductions On My Taxes As a Senior?
There are many available tax deductions for seniors, but it can be difficult to find out specifically what they are and if you are eligible for them. Consulting with a tax preparation professional can help ensure you don’t miss any deductions and can help prevent mistakes in the lengthy filing paperwork. In the meantime, here is a brief list of deductions to consider when you are filing your taxes or to give you a starting point for questions to ask your tax professional.
Tax Credits for Seniors
Maryland offers tax credits for various circumstances. One of these is the Senior Tax Credit available to those 65 years of age and older. Be sure to check the most recent state guidelines to ensure you are claiming this tax credit correctly as policies and tax credit amounts may change over time.
Assisted Living Costs
Expenses for assisted living can be a deduction if the care is provided mainly for medical reasons. It can be tricky to know if you qualify for this specific deduction, so asking a tax professional could be greatly beneficial.
Maryland Specific Tax Benefits
The state of Maryland offers special benefits beginning when an individual is 65 years of age. There are property tax credits available for seniors and certain exemptions available for retirees as well.
Can Assisted Living or Medical Expenses Be a Deduction On My Taxes?
Yes, assisted living and medical expenses may be a possible deduction on your taxes; however, there are certain criteria each circumstance must meet in order to be eligible.
Assisted living costs could be a deduction if the care is primarily for medical reasons. Since every case is unique, it can be difficult to know if your care qualifies. That is why it is important to ask a caregiver in your Lanham, MD senior living community and possibly consult with a tax professional to see if the specific care you receive qualifies as primarily medical.
Medical and dental expenses could also become a deduction. The IRS allows deductions for qualified medical and dental expenses that exceed a certain percentage of adjusted gross income; at the time this article is written, the criteria for medical and dental expenses not compensated by insurance must exceed 7.5% of the filer’s annual adjusted gross income. If you are unsure if your expenses qualify, it is highly recommended that you consult a tax professional in your area to ensure accuracy when filing.
Who Can Help Me Gather Documentation For My Taxes?
Sorting through papers to find just what you need for taxes can quickly feel overwhelming. This is especially true if you feel a little more forgetful some days than you used to.
Instead of becoming discouraged trying to locate the documentation you need on your own, enlist the help of a trusted loved one or caregiver. The papers you need may be simple for someone else to find, which could save you hours of frustration. On the other hand, if you’re both unable to find them, they are likely able to help request copies of the documents you need.
Additional Resources for Seniors
Just like taxes, your options for senior living may seem unclear at first. There are many aspects to consider like location, finances, available services and amenities, level of care, and so much more. That’s why our team has put together a guide to help make the possibilities crystal clear. Download our free guide, Senior Living Demystified, to answer your questions and provide peace of mind as you continue on your journey to find the ideal senior living arrangement for your unique needs and lifestyle.
