Aside from dreaded amounts of paperwork, tax season can be especially challenging for older persons. In fact, seniors may find themselves having to adjust to unforeseen cost-increases. Luckily, there are many tax breaks and relief programs available to seniors that can make the taxation process a bit easier and, more importantly, save money!
By following these easy tips, you may be able to both avoid penalties and even lower the total amount you will have to pay by hundreds or thousands of dollars. Just read on to learn more…
Tax Deductibles for Seniors
Tax deductions are subtracted from your earnings before you add up all your taxes. A few of the most common tax deductions include:
The Mortgage Interest Deduction & Home Sale
Interest paid on a home mortgage during a tax year can be deducted from your taxes. More specifically, it allows taxpayers who own homes to reduce their taxable income by the amount of interest paid on their home loan.  In other words, if you have a mortgage, keeping a record of your payments to your home loan can help you cut your tax bill!
Similarly, when selling a private home you will have to pay capital gains tax. While it may initially sound complicated, this tax can be reduced by deducting the cost of selling the house itself from the total profits or gains.
Itemized Medical and Dental Expenses
You might also be able to deduct your out-of-pocket dental expenses if they are more than 7.5% of your gross adjusted income. According to TurboTaxCanada, “You can claim eligible dental expenses paid in any 12-month period ending in the fiscal year in question and which have not been claimed by you or by anyone else in the previous year.”  The same general structure may apply in the U.S. and can include dentures and dental implants!
In the same category is deductible medicare premiums for those considered self-employed and long-term care deductions. While medicare premiums can be deducted in certain situations if you are self-employed, for you, your spouse, and your dependents, holders of long-term care insurance policies can get tax deductions for premiums. Of course, the final deduction depends on whether or not you’re able the meet the criteria for this specific deductible.
Staying organized and having all the necessary paperwork together by or before tax season starts is a challenge for a lot of people, but doing it right can make filing your taxes so much less stressful. Gathering things like all your W-2 forms, 1099s, and various receipts, can be daunting, but it’s possible. Here’s how:
- Print a tax document checklist necessary to file your taxes and keep it handy
- Store every document you might need when tax time hits in one place. Anything you receive, you can put here and find it later. Even if it seems like something you won’t need, if it’s related to your taxes, it’s better to be safe than sorry.
- Putting all your documents and receipts in one place is just the start. You should also organize and separate things into folders so you don’t have to go over everything later on.
Avoid the headaches and get prepared for tax season earlier on in the year!
Make Contributions to your Retirement or IRA Account
Those of you that haven’t yet paid into your retirement account can do so by April 15 of the following year, according to the official IRA website.  Deductible contributions can lower your taxes and it’s always wise to put money away for the future.
For 2019 and 2020, the maximum IRA contribution is $6,000 for people under the age of 50, or $7,000 if you’re older than 50.  By paying the maximum contribution you can pocket as much as $1,500 on deductions. Keep in mind that there are many things to consider here and it can get complicated, so it is best that you talk to a qualified CPA first.
Find Free Tax Forms Online
There is no need to go to the library or post office to get the right tax forms anymore. Instead, you can download everything you need from the IRS website  and print it out at home. Another option is to request that they send your printed copies through the mail. Finally, you can also use tax software like TurboTax or QuickBooks that have every form you could want.<
File Taxes Electronically to Save Time and Money
Besides always having the right tax forms at your fingertips, filing your taxes electronically through specialized software has other benefits as well. Here are the most important ones:
- When you file electronically, the IRS will send you an acknowledgement that you’ve filed your taxes. This is something you do not get when filling taxes the traditional way. This is a good way to avoid additional penalties or accrue interest when a paper return is filed and then lost.
- The IRS will process electronic returns faster. This means that you might get your refund as much as three to six weeks earlier than if you file by paper.
There is no need to stress over taxes if you keep these tips in mind. Organize documents and receipts, get the right forms, and try filing electronically to save time and money on your this year’s tax return. It is important, to do some personal research when filing taxes as these are just tips to help the reader.
 IRS. “IRA Year-End Reminders” Nov 23rd, 2020. https://www.irs.gov/retirement-plans/ira-year-end-reminders
 IRS. “IRA Topics – IRA Contribution Limits” Dec 15th, 2020. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
 IRS. “Forms, Instructions & Publications” Dec 9th, 2020. https://www.irs.gov/forms-instructions/
 Orem, Tina. “Mortgage Interest Deduction: What Qualifies in 2020.” Feb 29th, 2020, NerdWallet. https://www.nerdwallet.com/blog/mortgages/mortgage-interest-deduction/
 TurboTax Canada. “Tax Tip: Which Dental Expenses Are Considered Deductible Medical Expenses When Filing Income Taxes?” Jan 9th, 2020, TurboTax Canada. https://turbotax.intuit.ca/tips/tax-tip-are-dental-expenses-considered-medical-expenses-when-filing-income-taxes-5242#:~:text=The%20Medical%20Expense%20Tax%20Credit,or%20may%20have%20to%20pay.&text=If%20you%20paid%20for%20dental,Dentures%20and%20Implants