As your parents age, it's important to prepare for their financial future. This means ensuring that your senior loved one is ready for the 2023 tax filing season. Financial moves that you help your senior parents take now can pay off when it's time for them to file their taxes.
Specific Tax Benefits for Seniors
Some seniors may qualify for a variety of tax benefits. In fact, some people over the age of 65 qualify for a higher standard deduction. There are also exemptions for some, so they don't need to pay taxes on Social Security benefits. Over the age of 70.5 years, seniors can reduce their tax bills by donating money to charity.
How Does the New Tax Cuts and Jobs Act Affect Seniors?
The Tax Cuts and Jobs Act passed in 2017 aimed to provide tax relief to individuals and businesses. While the new act affects everyone, there are a few aspects specifically geared toward seniors. For instance, seniors may be able to take advantage of higher standard deductions and the ability to deduct long-term care insurance premiums on their taxes. In addition, the act doubles the estate tax exemption, which could be beneficial for seniors planning their estates.
The Importance of Staying Organized While Preparing Your Taxes
When preparing your senior parents' taxes, it's important to stay organized. You don't want to waste time searching for an essential document. It's possible to miss tax deductions or credits if you're rushing due to a lack of organization.
Gather Necessary Documents
When filing your taxes, you'll need to gather several documents. These documents include:
- Tax returns from previous years: You'll need to have all of your senior loved one's past tax returns on hand in order to file this year. These documents provide essential information that you might need when preparing taxes for the current year.
- W-2 forms: These forms will contain your senior loved one's wages, tips, and other income. It shows the amount paid into taxes, Social Security, and Medicare.
- 1099 forms: These forms will contain any miscellaneous income, such as interest or dividends. If your senior parent does any contract work, they'll receive 1099 forms for each company.
- Social Security statements: This statement will contain any Social Security income and other benefits your senior loved one receives. It also reflects if any taxes were taken out of the payments.
- Investment information: If your senior parents have any investments, you'll need to keep track of their activity throughout the year. Many investment firms will send your senior relative a tax form.
Senior Helpers Can Help With Daily Tasks
Filing taxes can be stressful, especially for seniors. On top of that, they need to manage everyday tasks for their home and their health! Make sure you help them navigate the 2023 tax filing season well through financial planning. And if they need assistance to stay better organized with other tasks, Senior Helpers is here for them! We provide professional care services for seniors in Fontana, Pomona, Ontario, Rancho Cucamonga, Montclair, and San Bernardino County. Contact us today for more information on ways we can help!