Unless you are an accountant or hire a skilled accountant to do your taxes, you may be unaware of the variety of available tax deductions for seniors. Taking the time to learn will save you money you can use on things you enjoy. You worked hard for your money so do what it takes to hold on to as much of it as you are entitled to! Here are five deductions you don’t want to miss.
As we age, we usually visit the doctor and dentist more often and may incur larger bills. The good news is you can deduct many of these expenses, including health insurance premiums, Medicare premiums, long-term care premiums, prescription medications and skilled nursing senior care services in OKC. In 2013, legislators voted to approve a cap on the amount you can deduct, allowing only medical and dental expenses exceeding 10 percent of your adjusted gross income (AGI). However, Congress made an exception regarding tax deductions for seniors. They voted to exempt seniors from that cap until 2017. If you were 65 or older in 2016, you can use a lower cap of 7.5 percent to calculate your medical and dental deductions for 2016.
If you’re one of the many seniors who sold your home in 2016 and made a large profit, thanks to decades of equity, you don’t have to pay tax on that income. The fine print? You must have lived in the home for two of the five years preceding the sale of the house. The non-taxable profit cap is $250,000 if you are single and $500,000 if you are married and filing together.
If you regularly contribute to your church or favorite charity, the IRS smiles upon your generosity. You can take itemized deductions on cash contributions in the amount of up to half of your AGI. Donations of property are typically deductible at its fair market value at the time you donated it.
Many seniors who have officially retired from the full-time grind still work in some capacity to supplement their income or simply because they enjoy it. If you work as a freelancer or a consultant or own your own business, you can deduct business-related expenses. These expenses will vary depending on what your business is, but may include business costs, such as airfare, car mileage, gasoline, cell phone, equipment, office space and more.
Even though there are affordable senior living communities in Oklahoma City, the cost of assisted living is still daunting for many seniors. It’s important to know exactly what deductions seniors are eligible for and to take advantage of them. If you don’t, it’s like giving Uncle Sam a gift! If you’d like to learn more about the cost of our outstanding facility, contact us at Village at Oakwood today.