The U.S. tax code is complicated and constantly changing, making it difficult to know precisely what deductions you may be eligible for as a senior. Fortunately, many tax benefits are available specifically for seniors – including deductions and credits – which can help lower your taxable income significantly if you take advantage of them properly. Here's an overview of the most common deductions available to seniors so that you can make the most of your taxes this year:
Understanding Tax Deductions
Tax deductions are one of the most common tax benefits available to seniors. A deduction reduces your taxable income, which in turn reduces the amount of taxes you owe each year. This is different from a tax credit, which directly lowers the amount of taxes you owe instead.
Which Deductions are Available to Seniors?
The most common deductions available to seniors include the standard deduction, itemized deductions, charitable donations, and medical expenses. Let's take a closer look at each of them:
Standard Deduction & Itemized Deductions
The standard deduction is a set amount that can be taken off your taxable income each year. For seniors, the standard deduction increases to $13,850 in 2023. In addition, you may also be eligible for itemized deductions if you have specific expenses such as mortgage interest or medical bills.
Charitable Donations
Donations to charitable organizations are also tax deductible for seniors. Any donations you make can be deducted from your taxable income, so it's important to keep track of all receipts and donation amounts throughout the year.
Medical Expenses
Medical expenses are another type of tax deduction that seniors can take advantage of. You can deduct any medical costs you've paid throughout the year, such as doctor visits, prescription medications, and long-term care services.
Strategies to Maximize Your Tax Deductions
There are several strategies you can use when it comes to maximizing your tax deductions. Here are some things to consider:
Keep Receipts for All Expenses
Make sure to keep all receipts for any expenses that may qualify for a deduction – such as medical bills or charitable donations – throughout the year. This will help you easily document and track any eligible expenses when filing your taxes.
Take Advantage of Tax Credits
Tax credits are different from deductions in that they directly reduce the amount of taxes you owe instead of reducing your taxable income. These credits can significantly reduce the amount owed and might provide a refund.
Know What Qualifies
Familiarize yourself with what qualifies as a tax deduction or credit. This can vary depending on the type of expense, so it's essential to do your research beforehand, so you don't miss out on any potential savings.
Select Senior Helpers Bluegrass for Assistance and Companionship
By understanding the various tax deductions and credits available to seniors, you can make sure you're making the most of your taxes this year. With careful planning and proper documentation, you can maximize your tax savings and enjoy a lower taxable income in Frankfort, Versailles, Midway, Georgetown, or Lawrenceburg. Senior Helpers Bluegrass can provide companionship or assistance for seniors who need extra help. Contact us today!