Elder Law

Income Tax Counseling for the Elderly

Tax Counseling for the Elderly services provide free tax counseling and tax return preparation.

The Tax Counseling for the Elderly (TCE) Cooperative Agreement Program helps organizations provide free tax counseling and assistance to elderly individuals in the preparation of their federal income tax returns. Trained volunteers from non-profit organizations provide free tax counseling and basic income tax return preparation for senior citizens aged 60 and older. When you go for tax counseling, you may want to discuss the following issues that are relevant for seniors.

Who Must File an Income Tax Return

Whether you need to file an income tax return depends on your income, your age, your status (qualifying widower, married, and so on), according to the following IRS chart:

Filing Status Age on 12/31/2016 Must file if gross income is
Single Under 65 at least $10,350
65 or over at least $11,900
Married Filing Jointly Both spouses under 65 at least $20,700
Both spouses 65 or over at least $23,200
One spouse under 65 at least $21,950
Head of Household Under 65 at least $13,350
65 or over at least $14,900
Qualifying Widow(er) With Dependent Child Under 65 at least $16,650
65 or over at least $17,900

Your Filing Status

Your filing status determines your tax rate. You can file as a qualifying widow(er) if your spouse died in the past two to three years, you have not remarried, and your dependent child or stepchild lives with you. You can file as head of household if you are unmarried (or legally separated or married to a nonresident alien) and paid for over half the cost of supporting a dependent such as a child or parent. These filing statuses have higher standard deductions and lower tax brackets.

Types of Deductions

To compute your tax, first you need to figure out your taxable income, which is gross income less deductions. All taxpayers are eligible to reduce gross income by a series of deductions known as adjustments to gross income. The resulting figure is known as ''adjusted gross income'' (AGI). A taxpayer may then either reduce their AGI by a set figure known as the standard deduction or they may instead elect to itemize their remaining deductions. The amount of the standard deduction varies depending on the taxpayer's filing status.

Seniors age 65 or older are entitled to a higher standard deduction. Those who file single or head of household can increase their standard deduction by $1,550. Those who are married filing jointly can increase their standard deduction by $1,250 (or if you and your spouse are 65 or older, you can increase the standard deduction by $2,500).

Credit for the Elderly or Disabled

Elderly people with modest incomes may be eligible for a special tax credit. US citizens or residents may qualify for this credit if they are at least age 65 and have income under a certain limit. In order to claim the credit, the taxpayer must file a Form 1040 or Form 1040A with Schedule R, Credit for the Elderly or Disabled. The credit cannot be claimed when filing Form 1040EZ. For more information, see Publication 524, Credit for the Elderly or the Disabled.

Credit for Dependent's Care

Working taxpayers who care for disabled elderly parents or spouses may qualify for a tax credit for caretaker expenses. This credit is known as the Elderly Dependent Care Credit or the Aging Parent Tax Credit. The expenses must be spent to enable the taxpayer to hold a job or search for a job. The elderly parent or spouse must be physically or mentally unable to care for him or herself and must live with the caretaker at least half the year. Because this tax-saving device is a credit rather than a deduction, it results in a dollar-for-dollar reduction in the tax obligation, independent of the caregiver's tax bracket.

Getting Help

To locate a local Tax Counseling for the Elderly (TCE) site, use the IRS’s TCE Locator Tool or call 800-906-9887. Note that some of the TCE sites are operated by the AARP Foundation's Tax Aide program and only operate during part of the year (generally between January and April, though some operate through October).

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