Making your taxes an absolute pain. If you’re not certain how to proceed, you could end up paying more than you should. Have you realized that if retired (or those who are 65 or older), you’re entitled to various tax breaks that could help you save thousands of dollars each year? Learn more about it here!
#1 Real Estate Tax Relief
If you or your spouse are disabled or are over 65 years old, you are eligible for inheritance tax relief. However, there are certain limitations to this tax relief. To qualify for 100 relief of %, the aggregate income of the household members can’t exceed $72,000 annually. If the gross annual income is 52,000 dollars or less, you can claim 100 percent relief. If the household’s income is more than $52,000 and less than $62,000, you’re entitled to only 50% tax relief. Suppose the total income of your home is between $62,000 and $72,000. In that case, you’re eligible only for 25% tax relief
without excluding what you can get for your home and its belongings. The total value of each household member’s assets should not exceed $340,000.
Are you interested in learning more about strategies for estate tax planning? Click here!
#2 Tax Credit To The Elderly Or Disabled
The 1040/1040A tax credit is specifically designed for people who are elderly and disabled. To be qualified to receive this tax credit, you must be at or above age 65 (or the age of 65 less one day) or be less than 65 years old, and are) retired due to permanent or total disability, b) had received an income from taxable disability and c) on January 1st the day you turned 65, you have not reached the age of retirement that is mandatory.
The IRS defines “permanent and total disability” as the inability to participate in any productive activity due to physical or mental limitations.
You’ll likely face income limitations based on your marital and filing status.
#3 Higher Claim Threshold
When you retire, you’ll be able to take on projects or pursuits that will give you a bit more money. This is because the minimum amount for filing taxes is higher than those under 65. If you’re a senior citizen, you could earn as much as $13,600 before filing your taxes, compared to $12,000 for those older than 64. If you have a spouse who is an older person, the household income could be as high as $26,600 before you need to declare.
The ability to earn a little income during retirement can allow citizens to boost their pensions while still enjoying their retirement time. Many seniors prefer part-time jobs to keep themselves busy during their working week and without worrying about the nine-to-five grind.