Tax Benefits for Senior Citizens
According to Ed Lloyd & Associates PLLC, the number of senior citizens and retired people in the USA is growing at a very fast rate. When a person turns 65, the way he files his taxes changes. It should be noted that there is a major difference between a retired person and a senior citizen. A retired person is someone who has completed his term of full-time work. On the other hand, a person who is of the age 65 or more is known as a senior citizen.
“Under the tax laws of the USA, senior citizens who still file taxes enjoy certain tax benefits,” says an expert at Ed Lloyd & Associates. He points out that these benefits are divided into two parts – Deduction and Credit. Deductions help in reducing the taxable amount whereas credits decrease the tax liability of a person.
Given below are a few tax benefits that the senior citizens in the USA enjoy:
Standard Deductions – The standard deductions that a senior citizen is eligible for depends on the income that he earns and on certain factors that have been discussed below:
- Marital Status: A senior citizen whose spouse itemizes his/her deductions is not eligible to file for standard deduction separately, according to Edward Lloyd.
- Status of Residence – A person who has not resided in the USA throughout the year is not eligible for these benefits.
Medical Deductions – The senior citizens are eligible to get a number of tax deductions based on the medical expenses that they might have paid for during the year. These deductions include expenses incurred for stay at the hospital, food provided by the hospital, medication, devices used for diagnosis, hospital services and other equipment like a wheelchair, crutches etc.
Ed Lloyd & Associates points out that a credit helps in reducing the amount a person might be liable to pay to the tax department.
- Credit for Disabled or Elderly People – If a person is above 65 years of age and is disabled, he/she would be eligible for a tax credit which would reduce the amount that needs to be paid as tax.
- Earned Income Tax Credit – If a senior citizen is working, he/she is eligible to enjoy this credit provided they have not earned more than $51,567 in a year.
Ed Lloyd claims that the senior citizen should be well aware of the benefits that have been provided to them.
Want to save on Taxes? Read – Ed Lloyd & Associates’ Tips to Save Taxes this Year