Seniors With Health Issues Need Assistance With Taxes

When our elderly are no longer able to file their income tax returns on their own, who helps them? Many of our elderly parents will need to file a federal and a state income tax this year. As a result of memory loss or poor health, a large number of the elder are no longer able to file their own returns like they did when they were younger.

Many of the elderly in the upper income brackets have lawyers and accountants to manage their financial affairs and file their tax returns. The larger number of our elderly citizens are not able to hire someone to prepare their tax return and give them tax planning advise. When they were younger, and tax laws were simpler, a large percentage of our seniors prepared and filed their own tax returns. In those days, each family learned how to manage their own financial affairs without benefit of lawyers or accountants.

Many times it’s one of the children or a family friend that helps an elderly person prepare and file their tax return. Here a few tips that will be helpful if you find that you are the person who is helping a senior to meet their tax obligation.

The first step is for you to determine their current year income. Collect all the current bank statements, mortgage statements and any statements of income such as a form 1099. Be sure to ask them to tell you about all sources of income they receive. An example of income that they might forget to mention would be interest payments, capital gains, dividends, or pensions. All these, plus any wages, social security payments and retirement income will be needed for the first step in preparing the taxes.

Looking for deductions is next. Be on the lookout for optometry, dental and medical expenses that they incurred during the year. Be sure to collect information about personal tax payments property tax payments, losses due to theft and other miscellaneous expenses. One expense sometimes overlooked is the expense of long term care. A portion of the cost for living in an assisted living facility might be deductible if the person is principally receiving the care for medical reasons. Premiums paid for a qualified long term care insurance contracts are also deductible medical expenses. In order for these types of expenses to reduce the taxable income, they will have to exceed a standard amount. Even if these expenses do not exceed the minimum standard, don’t be concerned because they will still be eligible to take the standard deduction.

In order to prepare the tax return correctly, you really do need to ask a lot of questions and review all the paperwork that is available. It makes good sense for seniors with memory problems or health issues to get some help in managing their taxes and their financial affairs.

Also, don’t forget that the Internal Revenue Service Volunteer Income Tax Assistance Program and the Tax Counseling for the Elderly Programs offer free tax help for taxpayers who qualify. Trained community volunteers help with special credits, such as Earned Income Tax Credit and Credit for the Elderly or the Disabled. Most sites also offer free electronic filing in addition to free tax return preparation.

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