Preparing income taxes is rarely ever easy. From making sure you claim all of the appropriate deductions to figuring out where to list investment income on your forms, it is a process that requires time and patience.
The Internal Revenue Service (IRS) is trying to change that. Beginning with 2019 taxes, seniors can take advantage of a new form and an easier process. It’s part of the Bipartisan Budget Act of 2018 and is designed for adults over 65.
Benefits of IRS Form 1040SR
Form 1040SR. has several elements that seniors may find helpful:
- a two-page form that uses large, easy-to-read print
- brighter shading to better identify where to enter information
- a Standard Deductions chart printed directly on the form
- designated lines to include specific types of retirement income.
Though the form is still in draft phase, it’s expected to be ready in early 2020.
Identity Theft Spikes During Tax Season
Another issue to consider as you or a senior loved one prepare taxes is the unfortunate fact that identity theft increases during tax season. According to the Federal Trade Commission, older adults are especially vulnerable. Experts say it’s a good idea to take steps that lower the odds of becoming a victim.
Here are a few ways you can protect yourself or a loved one from identity theft:
- Learn about common scams: The IRS publishes an annual list of their “dirty dozen” tax schemes. This list typically includes a popular phone scam in which criminals call tax filers pretending to be an IRS agent. The scam artists threaten arrest if they don’t receive a credit or debit card number over the phone to pay an outstanding debt. Review these tax scams with the older adults in your life.
- Safely store documents: Identity thieves rely on gaining access to documents that include your Social Security number. Once they have that information, they use it to open credit accounts and take out loans using your personal financial history. To prevent this, keep important documents and information locked up. Don’t carry your Social Security card or similar documents in your wallet or purse unless you will need them that day.
- File taxes early: Another form of identity theft that is on the rise is tax return theft. This occurs when someone fraudulently files a tax return claiming to be you and as a result, enjoys your tax refund. By filing early, you beat them to the punch. The later you wait, the higher the risk someone else will claim your money.
There is one last tip to remember as tax season approaches. If you are a caregiver for a senior loved one or you assist them in paying for senior care expenses, you may be entitled to a deduction. This article will help you learn more.
Source: Sunrise Senior Living