As you grow older, you start to qualify for a variety of tax benefits that aren’t available to younger contributors. This is particularly true once you turn 50, and especially after you turn 65 years old. Nest & Care, a reputable provider of home health care in Rockville, Maryland, offers the following tips to help seniors and retirees save money on taxes.
- Don’t forget to withdraw your required minimum distributions
Make sure to take your required minimum distributions. A “required minimum distribution” is a specific amount that the owner of a retirement account must withdraw on an annual basis starting after the age of 70. Forgetting to take the required minimum distributions from your retirement account can cost you in the long run. If you miss the withdrawal, you will be subject to not only the taxes, but also a 50% excise penalty on the amount that you were supposed to withdraw, but didn’t.
- Itemize your personal deductions, and medical and dental expenses
Generally, medical and dental expenses are two of the biggest expenditures for seniors and retirees. Fortunately, some of these expenses can be deductible once you itemize your personal deductions, including long-term care insurance premiums, nursing home care, prescription drugs, health insurance premiums, and other out-of-pocket expenses. Once you itemize your personal deductions, medical and dental expenses can be deductible from your income taxes on Schedule A of your tax return. However, please take note that they are subject to a limit.
- Donate to charity
If you are looking for a way to save on your taxes while helping others, donating to charity is the best solution for you. Charitable donations are deductible as itemized deductions (subject to special limitations). For instance, if you wish to donate something other than cash (i.e. property), you may deduct the fair market value of the property. However, if the property has risen in value, adjustments may become necessary. Note that charitable contributions are only deductible when you itemize. To make the most out of your donation, we recommend bunching your contributions in a single year so that you have sufficient personal deductions to itemize.
How about you? What do you do to save on taxes? As a concerned provider of home health care in Rockville, Maryland, we want to make sure that you are getting the best benefits that you can!
Nest & Care is a dedicated in home care in Montgomery County, MD. We provide services in Rockville, Bethesda, Silver Spring, and its neighboring communities. If you’re looking for a dedicated and professional caregiver who can help a loved one for their daily needs, Nest & Care can help.
We carefully match each client with the best caregiver and formulate an individualized plan that best suits the family’s needs and goals. Excellent services for our clients and families is of paramount importance to us. Call us today for your free in-home assessment by a Nest & Care Registered Nurse.