Tax deductions for seniors

It’s tax season. Oh, I know most of you will wait until April unless you’re expecting a refund check so this might be a little early for you. Still, for those of you who are at least beginning the process, here’s a list of tax deductions you may be missing out on.

Medical expenses., a website for caregivers, points out expenses for nearly 100 medical costs can be deducted. Those costs include: artificial limbs, bandages, hearing aids, wigs, dentures, glasses, orthopedic shoes, prescriptions and canes. To see the entire list go here.

Unfortunately, the IRS doesn’t allow deductions for vacations under this area but it does include the premiums you pay for insurance and the amount you pay for transportation to get medical care, as well as qualified long-term care services and some deductions for long-term care insurance contracts.

You can also claim for special equipment you have installed in your home if their main purpose is medical care for you, your spouse or a dependent child. And you can claim for your car if you have special equipment or a specialized design that’s needed for disabilities. You can also claim deductions for car expenses such as gas and oil, parking fees and tolls.

The self-employed who are qualified for Medicare can deduct the premiums they pay for Medicare Part B and Medicare Part D and the cost of supplemental Medicare policies. Unlike with most medical expense deductions, qualified individuals (self-employed and not covered under an employer-subsidized health plan) are not subject to the 7.5 percent of the AGI test that applies to everyone else.

Additional deductions to consider:

Estate tax on an inherited IRA.

If you’ve inherited an IRA, you could take a deduction for the federal estate tax paid on the IRA income.

If you’ve recently had a milestone birthday.

If you are 65 or older, you qualify for a higher standard deduction. You are considered 65, on the day preceding your 65th birthday. The additional deduction for age will be allowed if you are age 65 or older at the end of the tax year.

If you are legally blind.

If you or your spouse is legally blind, you qualify for higher standard deduction. This deduction is in addition to your deduction based on age if you qualify for that as well. You may still qualify if you are only partially blind.  The deduction is based on being blind or partially blind by the end of the tax year.

If you have a safe deposit box.

If you keep your investment documents and other information related to investments in a safe deposit box, the rental fee may qualify for a tax deduction.

For more up to date information on tax tips for seniors, get IRS Publication 554 (the 2014 version wasn’t out at the time of this article).

As always, please consult a tax advisor or lawyer.  They will have more information on itemized deductions.  The IRS also offers tips on their site on overlooked tax deductions and particulars about deductions and who qualifies.


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Posted in News, Taxes.

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