Bob Simpson, CPA, founder of Brinker Simpson & Company, joins us to share tips and tricks to reduce your tax bill by maximizing senior deductions.
In this episode, you will learn about standard tax deductions for seniors, how to use Medicare premiums as a building block off your standard deductions for additional benefits, important information regarding pensions, and more. This valuable information will help seniors understand and take advantage of the deductions available to reduce their income taxes each year.
What tax deductions are available to seniors?
Tax deductions for seniors are a topic of interest to many individuals who have reached retirement age. This episode explores various tax deductions available to seniors. Bob begins this episode by stating that seniors have access to a range of tax deductions that can help them save money on their taxes. He explains that seniors can take advantage of several deductions that are not available to younger taxpayers. For instance, seniors who are 65 or older may have a higher standard deduction amount compared to younger taxpayers.
Medical & Dental Deductions
One of the most significant deductions available to seniors is the medical and dental expenses deduction. Seniors can deduct any unreimbursed medical expenses that exceed 7.5% of their adjusted gross income. This deduction can include expenses for medical treatments, dental care, and prescription drugs. Bob makes it a point to note that seniors who have significant medical expenses may benefit from this deduction, which can help them reduce their tax liability.
Deductions For Charitable Giving
This episode also highlights the availability of deductions for charitable contributions made by seniors. Seniors who make donations to qualified charitable organizations can deduct those contributions from their taxable income. This deduction can be particularly beneficial for seniors who donate large sums of money to charity.
Deductions For Home Owners
Seniors who own a home can also take advantage of several deductions. For example, seniors who pay mortgage interest can deduct that interest from their taxable income. Additionally, seniors who make energy-efficient improvements to their homes may be eligible for the residential energy credit. This credit can help seniors save money on their taxes while also reducing their energy bills.
Retirement Savings Deductions
This episode also touches on deductions related to retirement savings. Seniors who contribute to a traditional IRA may be able to deduct those contributions from their taxable income. Similarly, seniors who contribute to a 401(k) or other employer-sponsored retirement plan may be able to defer paying taxes on those contributions until they withdraw the funds in retirement.
Deductions For Long-term Care
Finally, Bob discusses the availability of deductions related to long-term care expenses. Seniors who require long-term care may be able to deduct some of those expenses from their taxable income. This deduction can include expenses for nursing home care, home health care, and other forms of long-term care.
In conclusion, Bob Simpson provides a helpful overview of the various tax deductions available to seniors. Seniors can benefit from deductions related to medical expenses, charitable contributions, home ownership, retirement savings, and long-term care expenses. By taking advantage of these deductions, seniors can reduce their tax liability and save money on their taxes. For additional information on tax deductions, please head over to our blog where we outline additional tax deductions you might not know about.
