Tax season is upon us once again. The constant changes in tax laws can be tough to keep up with every year. Seniors might find tax season to be especially difficult because their retirement income may be derived from sources other than employment, and the related tax laws can be confusing.
Tax season also brings with it the potential for identity theft. Seniors are often targeted in financial scams of all kinds, and experts believe that tax refund fraud likely reached $21 billion during the 2016 tax season.
If you need help preparing your tax return this year, you’re in luck. There are a variety of resources, many of which are free, designed to help make tax preparation easier and safer for seniors.
Tax Preparation Resources for Seniors
Here are a few tax services catering to older adults:
- Tax Counseling for the Elderly (TCE): This free program is offered through the Internal Revenue Service (IRS) and designed for adults over the age of 60. IRS-certified volunteers provide in-person assistance for seniors. You can search the IRS database for a TCE site near your senior loved one’s home.
- American Association of Retired Persons (AARP) Foundation Tax-Aide: Most seniors are familiar with the AARP. This tax program is offered for adults of low or moderate income. They have more than 5,000 locations across the country to help seniors safely prepare their taxes. No AARP membership is required.
- Explore local options: Our final suggestion is to explore local nonprofits near your home to see which ones might offer free tax assistance to older adults. The local library, agency on aging, and senior center are all good places to start.
Preventing Senior Identity Theft During Tax Season
Every year, more and more people fall victim to scams and fraud in connection with tax season. Taking a few extra steps to protect personal information can help you avoid becoming a victim.
- Never go to a tax preparer without doing some research on them first. It’s easy for scammers to rent temporary space at a local strip mall or office building. Just because their office space looks legitimate doesn’t mean they are.
- Always store personal information in a safe, secure place at home. This includes bank statements, Medicare cards, insurance information, and credit card receipts.
- Don’t give any information out over the phone. A common and persistent tax scam is someone calling pretending to be from the IRS. They will threaten the senior with arrest if a credit card number or bank card number isn’t provided. Remind your senior loved ones that the IRS will never call to ask for money.
- As soon as documents containing personal information are no longer needed, be sure to shred them. It’s the best way to keep them from ending up in the hands of a criminal.
Tax Deductions and Caregivers
One common question during this time of year is whether or not Assisted Living Expenses are tax-deductible for a resident.
The answer is that in some cases, a senior or their loved one who helps finance assisted living expenses can take advantage of a medical care tax deduction. Review these tax deductions for assisted living before you meet with a tax preparer this year.