seniors successfully filed their taxes

Staying on Track: Tax Preparation Help for Senior Citizens

As you move into the next chapter of your life, you’ll find yourself saddled with a change in fiscal responsibilities. The shifts in the way you’ll be filing your government contributions won’t come with a manual, making this process confusing to navigate especially because not everyone knows how to give tax advice for senior citizens.

Filing your taxes may be stressful but knowing where to start and who you can talk to will make it more manageable. We’ve created a tax guide for seniors to help you find your way around this task and make it easier for you to execute. Let’s get started!

senior lady checking her receipt

When Do Seniors Have to File for Taxes?

As you reach the age of 65 years old, you might think that you’ll finally be exempt from filing for your annual returns with the Internal Revenue Service (IRS), but that won’t always be the case here. If you meet any of the following criteria below, you’ll need to file for your taxes.

You are single and your gross income is more than $14,250.

You and your spouse, who is younger than 65, file a joint return and your gross income is more than $26,450.

You and your spouse, who is at least 65 years old, file a joint return and your gross income is more than $27,800.

You and your spouse are filing separately and have a gross income of more than $5.

You are a widow/er and have a gross income of more than $26,450.

While you may not meet the requirements to file your taxes with the IRS, you may still be eligible to file for state taxes depending on your place of residence, so it’s best to ask your local government office about the tax requirements for seniors.

Before you file for your taxes because you think you’ve met the gross income threshold, it’s important that you understand what is taxable and what isn’t. We’ve made a quick guide below on what is and isn’t tariffed.

Tip: We also highly recommend that you regularly check the IRS website for the latest federal tax guide for senior citizens.

employed senior man by the entrance of the cafe

Social Security as Sole Income Source

Social Security benefits do not qualify as part of your gross income. If this is your only income source, then you won’t need to file for taxes.

Employment After Retirement

If you’ve decided to take a job after retiring, you’ll be subjected to filing for your tax returns. The decision whether you’ll get taxed or not will be dependent on the amount of your combined income.

You can compute for your combined income by adding up the following items:

Adjusted Gross income

Non-Taxable Interest

Half Social Security Benefits

The percentage of your benefits taxed are as follows:

Single Filers

Up to 50% is taxed if the combined income is between $25,000 to $34,000.

Up to 85% is taxed if the combined income is greater than $34,001.

Joint Filers

Up to 50% is taxed if the combined income is between $32,000 to $44,000.

Up to 85% is taxed if the combined income is greater than $44,0001.

seniors pleased with their fruitful investments

Retirement Accounts

If you decide to withdraw from your retirement accounts, you will be taxed depending on the type of account you own.

We’ve listed down the different accounts you can have and how they are taxed:

IRA, traditional IRA, 457, 403b, 401k, traditional 401K

These are taxed according to the tax bracket that you belong to.

Roth IRA and Roth 401K

Retirement plans like these are tax-free if the accounts are at least five years old.

Investment Income

The way your investments are taxed don’t change even after retirement. Regardless of your age, your investment’s dividends, capital gains, and interest will be taxed. If you purchased stock from a brokerage, the interest will be taxed at the standard tax rate. But, if you purchased an investment that can be considered a long-term capital gain, all its dividends will be taxed according to your income bracket.

Sale of Real Estate Property

If you’ve recently sold one of your properties, you will still need to pay the capital gains tax on it.

However, if you’ve lived in this home for at least two years before the transaction and the sale was below $250,000, you won’t need to pay taxes on it. If you and your spouse are filing jointly, then you can get up to $500,000 waived from taxation.

senior lady looks joyful with her pension cheque

Pension

When you first get your pension, you’ll be required to pay for the sum’s taxes on the year you received it. Some pensions may be taxable by the federal government but not by the state, so it’s best to ask your local government office for details like this.

To check if your pension is taxable by the federal government, you can go through the IRS’s pension interview to check. Before proceeding with this test, it’s best that you have the basics of your retirement plan on hand like its type, the amount of investment in it, if you have any costs to recover, and any previous distributions.

What is My Tax Rate?

Depending on your annual income, a tax rate will be imposed on you. This is all contingent on the amount you’ll get after computing for any of the taxable incomes we’ve mentioned above.

The IRS created a tool for you to determine your tax bracket, but before starting on that, you should have the following information on-hand to ensure a smooth transaction:

Gross income information

Social security benefits

Railroad retirement benefits

After using the IRS tool, you should be able to determine the tax bracket you belong to. We’ve listed below the seven income brackets you may be a part of and the corresponding tax rate.

elderly male reads his documents for filing taxes

Single Filer

10% for $0 and $9,875.

12% for $9,876 and $40,125.

22% for $40,126 and $85,525.

24% for $85,526 and $163,300.

32% for $163,301 and $207,350.

35% for $207,351 and $518,400.

37% for those who earned above $518,401

Joint Filers

10% for $0 and $19,750.

12% for $19,751 and $80,250.

22% for $80,251 and $171,050.

24% for $171,051 and $326,600.

32% for $326,601 and $414,700.

35% for $414,701 and $622,050.

37% for those who earned above $622,051.

Does Anyone Offer Tax Advice for Seniors?

Navigating the ever-changing world of taxes takes a lot of work and knowledge. While it’s possible to file for this obligation on your own, it’s best to consult someone who knows their way around it whenever you can, so you can maximize your tax breaks and because tax laws differ from place-to-place.

For example, in certain states like Texas and Florida, your retirement benefits will not be taxed. It’s also good to know that specialists who know their way around this process can tell you more about the tax deduction for seniors that you are entitled to.

senior consulting for tax preparation

Below are some organizations that can provide senior citizens help with tax preparation free of charge or at a low cost:

American Association of Retired Persons (AARP) Foundation Tax-Aide

The AARP offers tax assistance to senior citizens who belong in the low to moderate income tax brackets. Through this program, the AARP aims to help retirees file their taxes through in-person and virtual means. They give these services free of charge for all those who need it.

All the volunteers of this foundation are trained and certified by the IRS annually, so you can be sure that their knowledge is up-to-date and reliable.

IRS Backed Programs

The IRS has 2 programs that can guide seniors through their tax filing needs. The volunteers of this program have passed the intensive tax law training that the IRS has imposed.

To qualify for help to any of these programs, you’ll need to fulfill any of the following requirements:

You must make $58,000 or less.

You are a person with a disability

You speak limited English

Because of the high demand for this program, you’ll need to make an appointment ahead of time. So, make sure to call ahead and ask if there are still volunteers available before heading to your nearest site.

senior man reading tons of paperwork for his taxes

Volunteer Income Tax Assistance (VITA)

VITA is an initiative that was made to cater to low-income individuals who need help filing for their tax returns.

Tax Counseling for the Elderly (TCE)

The TCE is a program that specializes in giving tax advice to senior citizens that need it. Volunteers for this project can answer queries regarding pensions, retirement funds, and any issues they might encounter with their taxes

Area Agencies on Aging (AAAs)

The free services offered by the AARP and the IRS tend to run out of slots fast. So, if you’re unable to avail of their services due to its limited supply or unavailability in your area, you can look for your nearest AAA and they’ll help you search for other resources that are a fit for your budget.

What Do I Need to Prepare for the Tax Season?

While some people choose to only start preparing for tax season when April 15 starts to loom on the horizon, it’s important to remember that it’s always best to prepare for it throughout the year. We’ve listed down some critical things to take note of.

Remember Your Due Dates

You’ll need to have filed for your taxes by April 15 of each year. If that date falls on a weekend or a legal holiday, then it’s moved to the next business day.

If you filed for your tax returns by mail and it was addressed correctly and postmarked by the due date, then you it was submitted on time. However, if you filed for your tax returns electronically, the filing time and date will be dependent on your time zone. If you filed electronically, you should receive an acknowledgement receipt from the IRS with the details of your submission.

senior lady fixing her calendar while chatting on the phone

Documents

There is numerous paperwork that you’ll need to have readily available whether you’ll be filing for your taxes by yourself or with the help of others. This requirement guide for seniors filing taxes lists down all the items you’ll need to secure before starting on your taxes:

Valid ID (Passport, driver’s license)

Social Security Number (SSN) card

Individual Taxpayer Identification Number (ITIN), if you don’t have a social security number

Proof of foreign status if you’re applying for an ITIN

Wage and earning statements from all your employers
 • W-2
 • W-2G
 • 1099-R
 • 1099-Misc

Interest and dividend statements from banks (Form 1099)

Health insurance exemption certificate if you have one

Forms 1095-A, B, and C

Health Coverage Statements

Copies of income transcripts from the IRS and the State

Total amount paid for the daycare provider

Daycare provider’s SSN or Identification Number

Bank account routing and account numbers for those seeking direct deposit

senior couple pleased by reducing hassles for their tax preparation

Scheduling

Filing for your taxes can be an affair that takes a whole day, especially if you need to seek help for this government requirement. To stay safe, you should allot a whole day for this ordeal so you can give it your full attention.

Scheduling is critical for these kinds of engagements especially if you and your partner decide to electronically file for your joint tax returns. Filing for your taxes in this way will require that both of you are physically present in order to affix your signatures.

Stay Ahead for the Next Year

Just because you’ve finished your taxes this year, doesn’t mean that you shouldn’t think about them until the next. Reduce your future hassles by preparing for your taxes as early as possible.

You can prepare for your taxes by reading up on a financial guide for seniors whenever you have the time. That way you can strategize your finances and anticipate your tax filing needs for the next year. You can plan your retirement fund withdrawals early, properly store your pay slips, and take stock of what you could do better in your tax filing process for the next year.

No matter the age, the civil duty of filing for your taxes continues. While the annual filing of your tax returns is a lengthy process, you can make it much easier by organizing your documents and planning for your finances ahead of time.

If you’re looking to learn more about managing your finances, you can visit the Senior Assistance Club for help.