It’s hard to believe, but tax season is almost upon us. Again. Although most people use professional help to prepare their taxes, the onus is on the taxpayer to provide their tax professional with the required tax-related documents and information. Here’s a refresher on the basic documents you’ll need, as well as some resources and tips that particularly apply to seniors.
Tax documents
- Income statements, including W-2s, 1099s, 1099-R, Form SSA-1099, Form RRB-1099, 1099B. These statements should have been sent out by February 1.
- Documents related to the purchase or sale of a home, such as closing costs, etc.
- Receipts for any tax-deductible expenses, donations, etc.
- Records of deductible mileage, for example a log of miles driven for medical purposes or volunteer activity for qualified charitable organizations.
- Medical bills – receipts for co-pays from doctors, dentists and other medical professionals; In home care agencies or private pay caregiver costs; patient portions (responsibility) for hospital stays, prescriptions, medical supplies, prescription eye-wear, hearing aids, etc.
- Health and/or long-term care insurance premiums.
- Auto registration statement (a portion of your fees may be deductible).
It’s important to note that due to the 2018 tax law change, some previously deductible items may no longer be deductible. Or, it may be to your advantage to take the increased standard deduction rather than itemize. Check with your tax professional to see what works best for you.
Especially for seniors
- If you have misplaced your SSA-1099, you can request another one using your online social security account.
- In addition to insurance premiums and prescription drug bills, the costs of wheelchairs, dentures, and other medically required equipment may be deductible. The IRS provides more information here.
- If your aging parent is living in an assisted living or skilled nursing facility some or all of their monthly payment could be deductible as a medical expense. Senior housing facilities often report the medical portion of a resident’s total bill for tax purposes.
- Some moving expenses or modifications to a home to make it safe and accessible for an elderly person MAY be deductible as well. Gather the receipts, and check with your tax professional.
- To the extent that a home care aide provides nursing services — dispensing medication, bathing and grooming, and so on — their costs may qualify as deductible medical expenses.
Free tax resources for seniors
Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly provide free help for low-income taxpayers and taxpayers age 60 and older to fill in and file their returns. AARP (American Association of Retired Persons) also offers free tax assistance at their Tax-Aide sites, located across the country.
Tips for selecting a tax professional
- Check their qualifications. All paid tax return preparers must have a Preparer Tax Identification Number (PTIN). This is a number issued by the IRS that tax preparers must renew and pay a fee for annually.
- Check for disciplinary actions and license status via the Better Business Bureau, state board of accountancy or IRS Office of Professional Responsibility (Enrolled Agents).
- Review the entire return with the person who prepared it before signing it. Be sure you understand everything. Ask questions if you don’t.
- Be sure that the person you hire to prepare your return signs the tax form and includes their PTIN. This is required by law.
- Remember that you are legally responsible for what’s on your return even it if is prepared by someone else.
If you or your aging loved one need help putting together the necessary documents for your tax professional, please contact me at 408-318-0828 or email me for a FREE 30 minute consultation.
