How the Elderly Can Be Assisted in Filing Taxes

When the elderly are exempt from paying taxes

Since all U.S. individuals that receive payment are required to report their income to the IRS, the first thing to do before taking a nosedive into the endless pit that is the world of taxes is to learn whether the senior asking for your help is fully exempt from filing tax returns. Because according to the law any elderly citizens – meaning people aged 65 or older – who have no income other than Social Security benefits do not need to file tax returns at all, provided that they meet the following requirements:

• The filer is single with an adjusted gross income of less than $11,950.
• The filer is a qualifying widower with an AGI of no more than $17,999.
• The filer is married, files jointly with a spouse who is at least 65 years old, and their combined AGI is less than $23,300.
• The filer is married but files separately and has an AGI of $4,049 or less.

Simply put, if the elderly person has any other sources of income, then it has to be reported to the IRS, regardless of whether that income comes from investments, owning a home, or maintaining a side business to complement the pension. Also, exemption thresholds are subject to change every year and they don’t apply to state taxes at all, meaning that unless the person in question lives in a state where no income tax has to be paid then it’s always necessary to deal with state returns.

Tax assistance options for the elderly

While lawmakers do at least try to make sense of the constantly changing tax rules, tax season is still a challenge for the elderly. And even if seniors do try and cope with tax preparation and filing on their own, things will go smoother if you help them to avoid trouble with the IRS. Thankfully, there are actually two options with which an elderly person’s taxes can be done completely hassle free and, quite often, without paying a fortune or even anything at all.

Public tax services

Granted, there is always the option to turn to a certified tax expert but let us remind you that the price of getting a single return prepared in such way is around $200, which is really quite unaffordable for many elderly people. However, there are free of charge services provided by the government as well. Such a service is the Tax Counseling for the Elderly (TCA) that is specialized in answering tax questions related to senior citizens – those aged 60 and above. There is the Volunteer Income Tax Assistance (VITA) program as well, which is a free basic tax prep and filing service available for the disabled and for people earning less than $54,000.

Tax software

If there are more and more taxpayers relying on tax prep programs, then there’s no reason why it can’t be a good fit for handling the taxes of the elderly, too. In fact, there are several advantages to using tax software. First and foremost, they are user-friendly, which makes them ideal for more tech-savvy seniors who want to deal with their taxes on their own. Additionally, tax programs can handle all potential tax situations with ease, whether that includes handling different incomes, finding credit, or deducting qualified expenses like a medical alert system.

But one of the most important aspects of tax prep solutions by far is that they are cheap. For starters, tax companies always provide free programs with which simpler tax situations can be dealt with. However, if it is necessary to pick a higher-tier product for itemized deductions – for instance, if the total amount of medical expenses are above the 10% AGI threshold and standard deductions wouldn’t result in additional refunds – then the price can be paid by simply deducting the necessary fees from the total refund that the senior taxpayer would receive.