Advice from the IRS for Seniors Preparing to File Taxes for 2020

calculator, pens, pencils, and books to prepare income taxes

By Alison Wood, Contributing Writer

Let’s be honest— very few people enjoy that time of year when tax returns are due. And, when it comes to seniors, there are specific areas that need close attention.

The good news is that the IRS publishes advice online to help make the process smoother and easier for older adults.

 

 

This article highlights some key areas seniors need to be aware of, but you can also download the IRS’ tax guide for seniors if you want to walk through it all, step by step.

Standard deduction for seniors

For those who do not itemize their deductions, there are two key points to remember. First, you can get a higher standard deduction amount if either you or your spouse, or both of you, are 65 years or older. Second, if either of you are blind, you can get an even higher standard deduction amount. For more information, check out the instructions for IRS filing forms 1040 and 1040A.

Taxable amount of Social Security benefits

This is a section where it’s particularly easy to make an error. As such, the IRS advises that when you are making your return, you are especially careful when you calculate the taxable amount of your Social Security. You can use the Social Security benefits worksheet found in the instructions of IRS forms 1040 and 1040A, and then do a double-check before completing your return. The downloadable PDF titled Social Security and Equivalent Railroad Retirements Benefits provides further information and can be found by clicking HERE.

Credit for the elderly or disabled

If you qualify, it’s important to make sure you apply for this credit. Remember that you must be filing Form 1040 or Form 1040A to receive the credit for the elderly or disabled. You are NOT able to get the credit if you file using Form 1040EZ.

Who is eligible for this credit?

This credit is based on a combination of factors including your age, filing status, and income.

You might be eligible if:

You and/or your spouse are either 65 years or older, or under age 65 years old, and are permanently or totally disabled.

AND

Your income on Form 1040, line 38, is LESS than $17,500, $20,000 (married filing jointly and only one spouse qualifies), $25,000 (married filing jointly and both qualify), or $12,500 (married filing separately and lived apart from your spouse for the entire year).

And, the non-taxable part of your Social Security or other non-taxable pensions, annuities, or disability income is LESS than $5,000 (single, head of household, or qualifying widow/er with dependent child); $5,000 (married filing jointly and only one spouse qualifies); $7,500 (married filing jointly and both qualify); or $3,750 (married filing separately and lived apart from your spouse the entire year).

How to calculate the credit

Use Schedule R PDF (Form 1040 or 1040A), Credit for the Elderly or Disabled, to figure the amount of the credit.  See the instructions for Schedule R PDF (Forms 1040 or 1040A) if you want the IRS to figure this credit for you.

Also see the PDF of Publication 524 (Credit for the Elderly or Disabled); and PDF of Publication 554 (Tax Guide for Seniors).

Free IRS tax return preparation

If you or your spouse find it difficult to prepare your own tax returns, there is help available. The IRS-sponsored Volunteer Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Program offer free tax help to seniors and individuals on low to moderate income who need assistance. The TCE is particularly aimed at “those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.” This year, due to COVID restrictions, some of these programs are either closed or not operating at full capacity. However, you can find out what is available by clicking HERE. As availability might be in shorter supply, the earlier you can approach these organizations ahead of the tax deadline, the better.

The April 15 deadline for the filing of Federal and State income taxes is coming up fast. It often takes time to gather together all the records you need and to take advantage of the help that’s available, both online and in person. If you haven’t started the process yet, here’s our friendly reminder to take the first step, to help make this year a stress-free experience.

This information is courtesy of the IRS. You can read the full article by clicking HERE.