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Health & Fitness

Seniors and Taxes — It's that Time of Year

Seniors have special considerations to be aware of when filing tax returns.

It is tax time again and senior citizens have unique issues to consider when filing their State and Federal Returns.

If you are not married and 65 years of age or older, you must file an income tax return if your gross income is $25,000 or more. However, if you live on Social Security benefits, you don't include this in your gross income if you do not have income from any other source. If you do have income from sources, like dividends, capital gains, or wages that exceeds $35,000 for married, $25,000 for single individuals, then you are required to include a percentage of your social security benefits as taxable income.

"Home health care costs may be deductible as well," says Steve Bortnick, partner at Bederson and Company, in West Orange, NJ. "While only medical care, not domestic care is deductible be sure to keep good records of your expenditures. Pay with a check or credit card, not cash, and work with a registered agency."

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The Turbo Tax.com website states that, even if you must file a tax return, there are ways you can reduce the amount of tax you have to pay on your taxable income. As long as you are at least 65 years old and your income from sources other than Social Security is not high, then the tax credit for the elderly or disabled can reduce your tax bill on a dollar-for-dollar basis. However, this tax credit is only useful when you actually owe tax to the IRS.

There are also deductions related to health care services if one lives in a nursing home or assisted living facility. Work with a professional accountant to understand more about your opportunities for deductions.

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Steve Bortnick also advises that seniors have a family member, not their spouse, intimately involved in their financial decisions. "Often in marriage one spouse is in charge of the family finances for the household or small business," Bortnick says. "When that spouse becomes ill or infirm, the other spouse begins to deteriorate due to the stress and anxiety inherent in figuring out the finances while caring for their loved ones' medical and household needs."

Remember, if it sounds too good to be true, it probably is too good to be true. Don't have your tax returns prepared by strangers or those that are not part of a recognized firm. You will be handing over all of the information that one needs to steal your identity, money and credit.

Don’t try to hide your assets or resources in off shore scams that you hear about, or may receive through email. Never send money or give your personal information to anyone you don't know. People posing as State and Federal Government agencies will ask you for bank information, social security information etc. No official government organization will ask you for this information through an email to you.

“It is best to keep good records and receipts throughout the year so you are not overburdened with gathering your information at the end of the year," says Bortnick. "Be sure your information is submitted to your accountant by the end of March, at the latest, to ensure plenty of time for a quality review to take place."

To learn more about filing federal tax returns visit http://www.irs.gov/individuals/retirees/index.html

For information on deductions visit:www.irs.gov/taxtopics/tc423.html

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