Retirement is that period when you no longer have to work full-time to run errands. The period of retirement is a golden time in an individual's life and they can use it to its optimum. However, with retirement, the fear of financial uncertainty also kicks in. Hence, it is essential to have effective retirement planning.
Maximising the retirement income is important because of fixed incomes and rising costs and in order to achieve this, the best solution is to utilise the tax credits and senior citizen benefits.
Deduction of Tax for Senior Citizens
Senior citizens can claim n number of tax deductions. Some of these tax deduction includes the following:
1. Long-term care insurance premiums
One of the biggest advantages a senior citizen can have is that the cost of long-term care insurance premiums is deductible for seniors. Further, these sorts of ensurances also cover the price of long-term care including a nursing home or assisted living facility.
2. Medical Expenses
Senior citizens who have medical expenses exceeding 7.5percent of their adjusted gross income may deduct them. In addition, the cost of hospital care, prescription drugs, and doctor's visits is included.
3. Property Tax Relief
Individuals who have just stepped into their retirement phase may find paying the property tax a challenge. Hence, to avoid this stress, various American states run property tax relief programs for seniors. This program includes freezing of assessments or lower tax rates for those over a certain age.
What are tax benefits for senior citizens?
Apart from tax deductions, senior citizens can also avail a bunch of tax benefits. These benefits include:
Standard Deduction
Even seniors who itemize their deductions can take the standard deduction. A senior citizen's standard deduction is higher than a young taxpayer's standard deduction.
Higher Basic Exemption Limit
Among other benefits, the senior citizen can also avail higher basic exemption limit than those who are in their young age.
As a senior citizen, one can avail of these advantages to maximize their retirement income and enjoy a more comfortable retirement.
