Tips for Senior Tax Deductions
Aug 09, 2010 / By: Michael Bonfrisco, Estate Planning Attorney / Category: Estate Planning, TaxesWhen you reach retirement age, money can be a sacred thing, so you must spend it wisely. Savings of any kind are always welcomed, especially when it comes in the form of tax breaks. Here are some tax deductions to help make your retirement a bit richer:
Medical Costs. Did you know that almost all out-of-pocket medical expenses are tax deductible? Notate all of your health insurance premiums, nursing home costs, at-home long-term care, and even prescription drugs. You can deduct these items up to a certain amount when you file your taxes.
House Sales. Do you plan to sell your home and move into a condominium or a smaller house? Many retirees make this choice when their children have married and moved away. If you have owned your home for years or even decades, there is a good chance it is worth much more than you paid for it. As long you remain in your home for two years out of the five years before you sell it, and if your profit is less than 250,000, 500,000 for married couples, you may not have to pay taxes on your house profit.
Investment Expense. Investing is an important part of every strong retirement plan. But did you know that you can write off most investment expenses? These expenses include investment planning advice from your financial planner, equipment such as your home computer if used for investing, fees paid to any individual or institution in order to collect investment monies ,and fees for attorneys or accounting firms that assist you with investment legal or financial advice.
Business Expenses. Many retirees decide to open their own business. Business expenses are deductible as long as they are reasonable. You can deduct your equipment costs, travel costs, and cost of your business location, whether a home office or a storefront.
Donations. Giving is a great way to save money. You can give up to 50% of your yearly income and receive a tax deduction on it. You can also receive deductions for property you donate as well. This great deduction option allows many retirees to give back to their community or a beloved c charity, while still keeping their retirement savings intact.
Standard deductions. If you choose not to itemize your deductions, when you reach the age of 65, you will be eligible for a standard deduction higher than before. For single individuals over 65, the current standard deduction provides an additional 1,250. For married couples it is 2,000 total. A married couple can collect the extra amount for both spouses even if only one is over 65.
The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.
