Taxes for the over-65 set can feel more complicated for a variety of reasons. Here are some tax items to keep in mind this tax season.
By KATE ASHFORD of NerdWallet More than half of older taxpayers are worried they'll have to pay more taxes this year because of the 5.9% Social Security cost-of-living adjustment in 2022, according to a January survey by The Senior Citizens League, a nonpartisan seniors group.
These IRMAA surcharges can be difficult to manage"because they operate as a cliff, not a phase-in," says Edward Jastrem, a certified financial planner in Westwood, Massachusetts."For example, if you are $1 over an income tier, you are subject to the full surcharge." "If you take a regular RMD from your IRA, it gets added to your adjusted gross income for tax purposes," says Ian Weinberg, a certified financial planner in Woodbury, New York."It usually throws you into a higher bracket."
Listen now and subscribe: Apple Podcasts | Google Podcasts | Spotify | Stitcher | RSS Feed | Omny Studio If you're doing gig work, that counts as business income — which means you can deduct business expenses. This includes health insurance premiums if you're paying for your own insurance."Self-employed older adults on Medicare can deduct Medicare premiums for themselves and their spouses against business income," O'Neill says.
The taxable portion of your Social Security benefits is based on your combined income, which is the total of your adjusted gross income, nontaxable interest and half of your Social Security benefits. If you're filing taxes as an individual and your combined income is over $25,000 — or over $32,000 if you're filing a joint return — you may pay income tax on up to 50% to 85% of your benefits.
The Senior Citizens League. "Press Brief, Inflation — COLA Update." https://seniorsleague.org/assets/Press-Briefing-01.12.2023.pdf
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