Although most federal tax laws apply equally to all Americans regardless of age, there are some considerations unique to seniors. This guide will provide you with an awareness of IRS topics and accommodations that might be of interest to older Americans. If you find something you think might be useful to you herein, ask your tax advisor or consult the IRS website (www.irs.gov) for additional and up-to-date information.
Did you know that the IRS provides large print tax forms? That’s right. You can order large print tax forms from the IRS for reference purposes. A word of caution, however, is that large print tax forms may not be filed with the IRS. Use them for reference and practice purposes only.
Would you like to designate another person, such as a friend or family member, to speak with the IRS about your tax return should the IRS need to contact you? Good news. You can. There should be a simple check box on your tax return form where you can indicate this preference. See your tax form instructions for more details.
How about some free assistance filling-out and filing your tax return? You guessed it. The IRS offers this wonderful service to American seniors as well. The program is called “Volunteer Income Tax Assistance and Tax Counseling for the Elderly” and is provided free for low-income tax payers and tax payers over 60. Contact your local IRS office for more information on this program.
Do you volunteer for Retired Senior Volunteer Program (RSVP), Foster Grandparent Program, Senior Companion Program or Service Corps of Retired Executives (SCORE)? If so, you may not be required to report certain income and out-of-pocket expenses you received under these programs. Check with your tax advisor or current IRS publications for more information.
Do you receive a retirement plan distribution? You may already realize that this is taxable. However, did you know that the rules can vary depending upon when you began receiving funds and what type of plans the funds came from? This can be tricky business, so it’s definitely advisable that you consult your tax advisor and/or current IRS publications to gain a full understanding on how to report earnings from your retirement plan distribution.
What if you retired on disability? Normally in this case you must still report your pension or annuity as income. However, note that worker’s compensation is exempt from tax.
Did you receive Life Insurance proceeds during the previous year? The silver lining to this is that Life Insurance proceeds are not taxable. However, note that there is an exception to this. That exception would be if the policy was turned over to you for a price. If you think this applies to you, consult a tax advisor or current IRS publications for more details.
Have you received accelerated death benefits for the terminally or chronically ill? Again, there is a silver lining in this unfortunate circumstance. Such death benefits would be excluded as income.
Did you sell your main home during the past year? You may be able to exclude from income any gain up to a certain amount. Consult your tax advisor or current IRS publications for the current ceilings.
Are you a Veteran? First, thank you for your fine service to our country! Second, know that you do not need to include in your income any veteran’s benefits paid to you.
Do you participate in the Nutrition Program for the Elderly? I have more good news for you. Food benefits that you receive under this program are not taxable. However, if you work for the program and receive income from it, you will need to report that income, even if you also participate in the program yourself.
This guide provided you with just a brief overview of some of the items of interest and accommodations available to seniors from the IRS. For more information on any of these topics or if you have additional questions about filing your taxes, be sure to consult your tax advisor or IRS publications.
You may also find it useful to visit the IRS web site where you can do a search for “seniors” to find additional useful information. Or take advantage of the Volunteer Income Tax Assistance and Tax Counseling for the Elderly program for further assistance.