Retirement is usually anticipated as a time of greater leisure, lower stress and indeed, hardly a care.
After a life of hard labor, responsibility and fastidious planning (we are hopeful on the latter item), you certainly deserve it. Sadly, the IRS has heard about your dreams and they’re having none of it.
The taxman intends to follow you to the unbreachable border of life. Indeed, if there was a WiFi signal in the next world, we would dread their emails into eternity. Retirees must be well informed on the tax opportunities and pitfalls that concern them, if they’re ever to gain the stress-lite life they crave. With the assistance of our linked author, we can examine four prime issues.
First, don’t be passive and expect your tax affairs to sort themselves out. Many income sources are liable for federal taxation. Some forms will have taxes deducted automatically, while other require that you specifically request it. If you’re worried about a big tax bill due to underpayment over the year, our featured author recommends the filing of quarterly estimated returns with the IRS, so you don’t create a shortfall.
Recent changes to the tax code, specifically the increased standard deduction, have eliminated the itemized deduction of healthcare expenses for most people – only those with major costs need apply. This doesn’t mean you shouldn’t document all of your annual costs and carefully preserve your records. Over the span of a year, expenses can add up, and if a major healthcare event occurs late in the year, you’ll want full documentation for the entire tax period to support your case.
Cases of retirees caring for elderly parents are quite common these days. A $500 credit is available for retirees in this circumstance if they meet a plethora of requirements. Take a close look to see if you qualify.
For more information, please read:
4 Important Tax Items Every Retiree Should Know About | Kiplingers