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What Tax Deductions Are Available for Retired Seniors?

Retired seniors receiving home care in Philadelphia will be happy to hear there are many new tax deductions for their age group that were not available when they were younger. To help your elderly loved one take advantage of some or all of these, it’s important to understand how they work.

Investment Expenses

Seniors who want to make the most out of their retirement should be receiving a majority of their income from investments. One of the reasons for this is the fact many expenses related to investing and investment opportunities are deductibles. This includes everything from CPA fees to safe deposit boxes.

Standard Senior Deductions

When it comes to filing taxes, there is quite a difference between being 64 and 65. Retirees who are 65 or older by January 1st each year receive a much larger base deductible as a gift from the IRS. In some cases, your loved one’s deductibles might increase by as much as 30 or 35 percent.

Medical Premiums

In addition to many medical treatments, your loved one’s premiums may be deductible as well. However, there are some unusual rules that apply to these particular deductibles, and it is important for married seniors to understand these rules so they do not get penalized on their taxes. If your loved one’s previous employer offers retiree medical coverage or if he or she is covered by a spouse who still works, then these deductibles do not apply.

Spousal IRA Contributions

When one spouse is still working and the other is not, tax issues involving retirement accounts get slightly more complicated. Seniors in this situation should speak with a tax specialist before making any major decisions. As a general rule, your loved one’s spouse can contribute up to $6,500 a year into his or her IRA tax-free.

Vacation Home Sales

Couples who have more than one home often find it difficult to sell off their property after they retire without taking a huge hit to their finances. One simple way your loved one can bypass this is to sell off his or her primary residence and live in the secondary home for at least 2 years. Once your loved one has lived in the vacation home for 2 years, profits of up to $250,000 will be tax-free.

Some long-term care services may be tax deductible as well. To learn about other ways to help your loved one manage his or her finances post-retirement, reach out to Home Care Assistance. Our experienced caregivers can help around the house with a wide array of daily tasks, and we also offer comprehensive Parkinson’s, post-stroke, and Alzheimer’s care for Philadelphia seniors who need more extensive assistance. For more information on our in-home care services, call a Care Manager today at (215) 645.4663 or (484) 643.4663.