Easing Tax Time for Seniors

Erin loves the winter season in the DC area. She enjoys the brisk weather and the beauty that surrounds her, especially when the ground and the trees are covered with a light dusting of snow. She celebrates three of her grandchildren’s birthdays in February and her anniversary and St. Patrick’s Day in March. One thing Erin never looks forward to in the winter months is tax season.

Similar to Erin, most of us dislike filing taxes. In fact, unless you’re an accountant or own an H & R Block or Liberty Tax franchise, taxes are something we don’t typically look forward to. Filing can be time-consuming and confusing, especially with the tax laws always changing. Retirement, government benefits, increasing health care costs and other financial changes can make this process especially complicated for seniors.

Even those with simple, uncomplicated financial situations usually prefer some guidance when it comes to filing their taxes. Fortunately, more and more helpful resources are becoming available to American senior taxpayers. Whether you’ve hit a roadblock while trying to prepare your own taxes or need a simplified form, it’s likely you can find the help you need using the programs I will describe in this article–most of which are free!

Tax Counseling for the Elderly (TCE) program

The Tax Counseling for the Elderly (TCE) program offers free tax help for qualified taxpayers who are 60 years of age and older. IRS-certified volunteers who are knowledgeable about pensions and retirement-related issues unique to seniors provide free assistance and basic income tax return preparation with electronic filing at community locations across the country. These volunteers are often retired individuals associated with non-profit organizations that receive grants from the IRS.

Tax return preparation assistance is provided to senior taxpayers during the normal period for filing Federal income tax returns, which is from January 1 to April 15 each year.

When looking for a TCE site, please keep in mind that a majority of the TCE sites are operated by the AARP Foundation’s Tax Aide program. To locate the nearest AARP TCE Tax-Aide site between January and April use the AARP Site Locator Tool or call 888-227-7669.

Volunteer Income Tax Assistance (VITA) program

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $56,000 or less, persons with disabilities, seniors, and limited English-speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals.

Assistance is provided at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations.

To find a VITA site, please use the VITA locator tool.

Before going to a VITA or TCE site, the IRS suggests that you see Publication 3676-B (PDF) for services provided and check out the What to Bring page to ensure you have all the required documents and information the volunteers will need to help you. Available services can vary at each site due to the availability of volunteers certified with the tax law expertise required for your return.

Additional IRS Resources and Tips for Seniors

Besides the free services described above, there are additional resources and tips that the IRS offers for seniors as follows:

  • New Simplified Tax Form Now Available for Seniors – If you are 65 or older (or you turned 65 any time in 2019), you will have the option to use a new simple tax form for seniors, known as Form 1040-SR: S. Tax Return for Seniors, when you file your 2019 taxes. In order to use it, you need to take the standard deduction.

Form 1040-SR is similar to the now defunct Form 1040-EZ, which was designed for those with a straightforward tax scenario, such as taxpayers who take standard deductions. Learn more and access Form 1040-SR here.

  • Standard Deduction for Seniors – If you do not itemize your deductions, you can get a higher standard deduction amount if you and/or your spouse are 65 years old or older. You can get an even higher standard deduction amount if either you or your spouse is blind. You can use Form 1040-SR described above, which incorporates the higher standard deduction for taxpayers age 65 and older.
  • Taxable Amount of Social Security Benefits – When preparing your return, be especially careful when you calculate the taxable amount of your Social Security. Use the Social Security benefits worksheet found in the instructions for IRS Form 1040 and Form 1040A, and then double-check it before you fill out your tax return. See Publication 915, Social Security and Equivalent Railroad Retirement Benefits for more details.
  • Credit for the Elderly or Disabled is a credit for taxpayers aged 65 or older or for those who are retired on permanent and total disability and received taxable disability income for the tax year.

Requirements to qualify for the Elderly and Disabled Tax Credit are as follows:

  • You must be a U.S. citizen or resident alien.
  • You must be 65 years of age as of December 31, 2019 for tax year 2019 OR you were under age 65 as of 12/31/2019 and all 3 statements below are true:
    • You retired on disability before Dec. 31, 2019 and you were permanently and totally disabled at the start of retirement.
    • You received total taxable disability income for 2019.
    • You are under age 65 but you retired on total and permanent disability and received taxable disability income, but you have not yet reached mandatory retirement age as of Jan. 1, 2020 or the new tax year.
  • Your filing status also plays a role, for example if you are married you must file a Married Filing Joint return to take the tax credit for the elderly and disabled. You may also take the tax credit if you file as head of household.

The credit ranges between $3,750 and $7,500.

Visit the IRS website for more details. Also see Publications 524 (Credit for the Elderly or Disabled); and 554 (Tax Guide for Seniors) for more details.

Other Important Planning to Do This Year

While tax planning and filing are important, so is planning for yourself and your loved ones. If you have not done your Estate Planning or Retirement Planning or had your plan(s) reviewed in the past several years, please don’t hesitate to call us as soon as possible for a no-cost initial consultation, or a free annual review for members of our Lifetime Protection Plan®:

Estate Planning Fairfax: 703-691-1888
Estate Planning Fredericksburg: 540-479-1435
Estate Planning Rockville: 301-519-8041
Estate Planning DC: 202-587-2797

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