The Top 4 Tax Filing Goofs Made by Seniors
Not taking deductions. Turn 65 this year? You can increase your standard federal deduction by $1,600 if you’re single and $2,600 if both you and your spouse are 65 or older. That will lower your taxable income by $13,800 if you’re single. And a whopping $27,000 for married couples filing jointly.
Not realizing Social Security can be taxed. If you supplement your payments with a part-time job or savings, you may have to pay. Singles with a combined income of more than $25,000 a year and married couples making more than $32,000, must pay taxes on their Social Security earnings.
Miscalculating tax on dividends. Depending on dividend-producing stock to supplement your retirement? Pay nothing on qualified dividends if your adjusted gross income is less than $38,600 a year. Take home more than that? The rate increases to 15 or 20 percent.
Not giving your return a once-over. Mistakes on your tax return — a misspelled name, for example, or inaccurate Social Security number — could end up costing you big. At the very least, it might mean a delay in your refund.
Don’t forget to click the “Learn More” button and discover even more money secrets — like 7 ways to increase your cash flow on a fixed income — listed on page 12 of Independent for Life.
- FC&A Staff Writer