Among all the taxpayers in America, senior citizens tend to make many blunders when it comes to their taxes. With so many years of experience handling their income, why is that? Once you reach a certain age, the rules may change which can inevitably lead to potential mishaps or a smaller return. Learn about some of the most common tax break mistakes that people over 50 make before reaching out to A. Roberts & Associates for professional help with your taxes and retirement plan!
- Don’t Assume You’re Too Old For Taxes
Are you already retired and no longer receiving W-2s? Don’t make the mistake of thinking that you don’t have to do your taxes anymore just because you don’t have any earned income to report. Unearned income is still income, and so you will still need to file taxes if the amount you receive reaches a certain threshold.
| Do I Still Need To Report Tax-Free Income? If your income isn’t taxed, you should still report it in case that income influences your qualifications for other tax breaks and credits. It doesn’t hurt to report everything you can, but it’s better to be safe than sorry! |
- Stay On Top Of Tracking Your Expenses
When you stop working, it can be easy to adopt a laid-back mindset. However, many seniors have been known to get too comfortable and neglect certain duties that can hurt them later. One of the most common responsibilities that seniors end up dropping is the task of tracking their expenses and keeping tax records. Why is it crucial to track your expenses even as a senior? Some of those expenses can be used for tax write-offs, saving you more money than you may have been expecting to save.
- Make Sure You’re Taking Your Withdrawals
If you’re at least 73, you are required to start taking out withdrawals from your retirement account. There’s a minimum amount that you have to take to avoid receiving a penalty, which can be anywhere from 25-50% of the required amount. This is referred to as your “required minimum distribution” or RMD. Many seniors 73 and over end up losing a bit of cash from not knowing about their RMD, so it’s best to stay on your toes.
- Don’t Be Ignorant Of Tax Changes
The rules and laws of taxes change every year, and just because you’re no longer working doesn’t mean you get to ignore these changes. Some updates could apply to you, so it’s in your best interest to stay informed. You don’t have to obsessively stalk every news channel, but be open to learning important information whenever tax season is coming up, or at least touch base with your trusted tax person once a year.
- See If You Can Itemize Your Medical Expenses
Itemizing expenses isn’t something that only the self-employed do. If you have medical expenses, it’s very possible that some of them can be itemized to help you maximize your taxes. If you’re not sure what you can and can’t deduct, go over everything with your trusted tax professional.
- Hire A Tax Professional
This might be a lot to take in so far, but the biggest takeaway we can give you is to meet with a financial advisor to help you navigate the tax process on a yearly basis (at minimum). Your trusted expert can help you keep up to date with any changes, figure out what expenses you can itemize, and more. But most importantly, hiring a professional can help prevent you from making any mistakes that can affect your finances!
Avoid Tax Mistakes By Reaching Out To A. Roberts & Associates!
Count on the knowledge and experience that A. Roberts & Associates has accumulated over the years for smooth sailing during your retirement. We’ll help you with your taxes and retirement plan so you can be prepared for the years ahead! Contact us today to schedule a consultation.