It's Almost Tax Season – Four Things Seniors Need to Know
January 3, 2018
With the New Year comes the time to start gathering paperwork and filing taxes. The Senate approved the tax bill, as did the House. It's going to bring sweeping changes for some. Most changes won't take place with this year's tax filing, but there are things people need to do in 2018. Here are four things your parents need to know about filing future income tax returns.
Senior Care in Menlo Park CA: Things to Know for Tax Season
It's Probably Best to Take the Standard Deduction.
Standard deductions are almost going to double. For seniors who itemized deductions, it may just be smarter to take the standard deduction when filing in 2019. The plan is to have the standard deduction increase to $12,000 for individuals and $24,000 for couples.
Your parents should look at the upcoming changes and decide if it's worth keeping all of the paperwork they have in the past. If they're going to use the standard deduction, they won't need to do as much record keeping.
Deductions for Medical Expenses are Spared for Now.
For now, the government decided to leave the medical expense deduction. In fact, the amount seniors can claim increases for two years. Seniors can claim these expenses if they exceed 7.5 percent of a senior's yearly gross income. After two years, this increases to 10 percent.
Medical Premiums May Increase if You Don't Qualify for Medicare.
One of the biggest concerns is that the penalty people had to pay for not having health care is gone. It's been retracted. Now that people no longer face a penalty for not having insurance, estimates are that some will cancel policies to save money.
As companies have fewer subscribers, it's logical that they'll raise rates to make up for the lost money. Even if a senior gets more of a refund on their taxes, it may get eaten up by higher insurance premiums.
Most seniors will qualify for Medicare when they turn 65. The coverage they get depends on how many work credits they have, however. If they don't have 40 work credits, which is about 10 years of work, they may not qualify for coverage for inpatient hospital care.
It's Unlikely Seniors Will See a Higher Refund.
For seniors who live on Social Security, it's very unlikely that there will be much benefit at all. Seniors who will benefit are going to be the wealthier seniors who paid an alternative minimum tax or estate taxes.
Experts agree that for seniors who make around $30,000 a year, there's unlikely to be any noticeable benefit. Most will qualify for a maximum tax cut of a few hundred dollars.
Health must remain a primary concern for seniors. Make sure your mom or dad has the help they need to age at home. For now, declaring some of their medical expenses for necessary senior care services appears to be safe from cuts.
Make sure your parents have the help they need with medication reminders, transfers, and meal preparation. Senior care agencies can assist with all of these things.