5 Possible Tax Deductions for Seniors & Aging Adults
With tax filing in full swing, senior citizens should consider a few of the tax advantages offered to those at or near retirement age. If you provide part-time or live-in care for an aging parent or loved, you may also be eligible for a possible tax deduction. Here are a few of the tax considerations applicable to seniors and their caregivers.
- The Standard Deduction for Senior Citizens – Those over the age of 65, or who are permanently disabled are entitled to an increased standard deduction. The standard deduction is increased by $1,200 and by $1,500 if the taxpayer is filed as single or head of household for the 2014 tax year. An additional deduction is available if the taxpayer is blind. The increased deduction is available only if the standard deduction is used.
- Credit for the Elderly and Disabled – This is a tax credit of up to $1,125 for low-income senior citizens. Current income limits for claiming the deduction are $17,000 for a single filer and $25,000 for a joint filing husband and wife. There is a limit of $5,000 in nontaxable Social Security benefits. A special schedule must be filed to clam the credit.
- Medical and Dental Expenses – As most seniors know, a greater proportion of their income (average of 30%) goes to medical expenses. If a senior citizen’s medical expenses exceed 7.5 percent of their Adjusted Gross Income, they are entitled to claim the excess expenses as a deduction. Seniors must itemize deductions to claim medical expenses. The threshold for most taxpayers was raised to 10 percent, but those 65 and older use the old 7.5 percent threshold until 2017.
- Elderly Dependent Care Tax Credit – Parents of preschoolers are familiar with the Child Care and Dependent Tax Credit, which can turn the costs of daycare expenses into a tax credit. Not as many are aware that this same credit can be used for the elderly. In short, if a taxpayer pays for the care of an elderly parent or other dependent to permit the taxpayer to work, a tax credit is available to defray the costs. Income limits apply and a sliding scale applies to the percentage of costs that are applied to the credit.
- State and Local Real Estate Taxes – Most states provide a state property tax exemption or deduction for the property taxes owed by a senior citizen. For instance, New York offers an enhanced “Star” exemption for school taxes assessed against real estate. All seniors should check with their state and municipality to determine what is offered and if they are eligible.
For more information about senior or respite care in Cincinnati, reach out to Home Care Assistance. We are a premier provider of home care in Cincinnati, offering hourly and live-in care services to help families caring for aging adults. Call us today at 513-891-2273 and schedule your complimentary, no-obligation consultation for more information.