Don’t Overpay Uncle Sam
Every year, many Americans pay the IRS more than they should. To help seniors (and anyone else) avoid paying more taxes than they owe, the Senate Special Committee on Aging developed “Protecting Older Americans Against Income Tax Overpayment.”
The detailed document — a compendium of information on a variety of tax topics — offers tax tips that do-it-yourself tax preparers may find valuable. For example:
- In itemizing your deductions for medical and dental expenses, you may include transportation expenses incurred for necessary care, and you may generally include payments for qualified long-term care contracts.
- You may deduct a proportion of casualty losses, such as those that result from a flood, storm, or auto accident. You may also deduct losses due to theft.
- If you work, you may qualify for earned income credit.
- If you have an elderly dependent who spends eight hours or more a day in your home, the amount you spend on non-institutional “daycare” may qualify as credit for dependent care expenses.
Tax filing errors also cost you money. Among the top 10 tax filing errors are these:
- overpaying Social Security taxes
- unnecessarily declaring state tax refunds as income
- making math miscalculations
- not keeping sufficient documentation that you filed your income tax return on time (to avoid penalties).
Above all, don’t be a victim of ignorance — it will cost you money.
If you have tax questions, there are several avenues for assistance: the Tax Counseling for the Elderly program, in which IRS-trained volunteers assist persons age 60 or older with their tax returns at neighborhood locations; volunteer income tax assistance (VITA) aides in your community; and American Association of Retired Persons Tax-Aide sites or visit AARP.
AARP offers FREE tax assistance to adults 50 years of age and older.
SOURCE: Senate Special Committee on Aging and the American Association of Retired Persons Web Site
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