After paying thousands of dollars in taxes over the years, senior citizens deserve some tax relief. Whatever your financial situation, it’s crucial to understand that as you become older, your tax requirements will change. Most of the time, being 65 or older entitles you to higher tax breaks, and the IRS provides a number of tax relief options for senior citizens. Senior citizens who default on their taxes can take advantage of IRS debt relief options by consulting an experienced Dallas debt attorney. In this blog, we will discuss all you need to know about tax relief for senior citizens.
Filing taxes from a senior citizens’ perspective
The amount of money you can earn before paying taxes increases if you’re 65 or older. Single taxpayers under 65 years old need to file tax returns when their earnings reach $12,000. For those who are 65 years of age or older, they can earn up to $13,600 before they are required to file taxes. Additionally, you may not be required to file taxes if your only sources of income are your Social Security benefits. You can make $24,000 as combined income (more on that later) without having to worry about filing a tax return if you’re married, file jointly, and both you and your spouse are under 65. If one of you is 65 or older, you can earn even more: $25,300. If you’re both 65 and older, you can earn up to $26,600 before you need to file income taxes.
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Tax credits and deductions you should know
As you become older, the IRS starts to lower the tax threshold, and senior citizens have access to multiple tax relief programs. Let’s take a look at the tax credits, exemptions, and deductions to which you are eligible during your retirement years.
Senior Tax Credit
You must be 65 or older as of the last day of the tax year to be eligible for the tax credit. Besides being a senior citizen, you also need to be a resident alien or a citizen of the United States. If, however, you’re a non-resident alien that is married to a citizen or resident alien, you may still be eligible. Married people who want to apply for the senior tax credit must file jointly, unless they did not live together throughout the tax year. Income is another aspect that determines whether a taxpayer is eligible to claim this benefit. You cannot claim the senior tax credit if your income exceeds the threshold for your filing status. The upper-income limits for senior tax credit eligibility are listed below:
- $17,500 or more if your filing status is single, head of household, or qualifying widow(er)
- $20,000 or more if you’re married, but only one of you qualifies for the credit
- $25,000 or more if you file jointly as a married couple
- $12,500 or more if you file a separate married return but lived apart from your spouse the entire tax year
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Taxable Amount for Social Security Benefits
Several factors will determine whether you must pay taxes on your Social Security benefits. Your total income determines whether you are subject to taxation on your Social Security benefits. Along with Social Security and tax-free interest, this figure should also reflect taxable retirement income. You can then multiply the sum by half of the amount of Social Security benefits you received throughout the tax year. That’s your combined income. The combined income limit is $25,000 if you’re single, head of household, or a qualifying widow or widower. If you’re earning less than that amount, your Social Security benefits don’t need to be included in your taxable income. If you are married and filing taxes jointly, the income limit increases to $32,000. You can consult a Dallas tax lawyer to get more clarity regarding your specific case.
If you are not sure whether you have tax debt or are eligible for senior citizen tax relief options, you should look for tax help from the best tax lawyers in Dallas. They can help you explore the different IRS debt relief options to identify one that is best for you. When looking for a reliable Dallas tax lawyer, look no further than the Law Offices of Nick Nemeth. Our team of experienced Dallas tax attorneys can help resolve all IRS tax problems, including debt-related issues. We can also help you enrol in IRS debt relief programs such as IRS tax installment agreement or offer in compromise. Contact us today for a confidential no-obligation discussion about your case at (972) 426-2991 or fill out our contact form, and we’ll get back to you as soon as possible.