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These Are 5 Tax-Filing Warnings for Retirees

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Social Security Benefits May Be Taxable Depending on your total income, a portion of your Social Security benefits may be subject to federal taxes.

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Don’t Forget to Take Required Minimum Distributions (RMDs) If you're 73 or older (as of 2023), you are required to take RMDs from traditional IRAs, 401(k)s, and other tax-deferred retirement accounts.

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Pension and Retirement Plan Income is Taxable Income from pensions and retirement accounts like IRAs and 401(k)s is generally taxable. Make sure to account for these withdrawals on your tax return

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Watch Out for the Senior Tax Credit Retirees over 65 with lower income levels may qualify for the Credit for the Elderly or Disabled. However, this credit has strict eligibility requirements and is often overlooked, so be sure to check if you qualify.

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Medical Expenses Can Be Deducted If you spend more than 7.5% of your adjusted gross income on unreimbursed medical expenses, you may be able to deduct these costs on your tax return

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State Taxes on Retirement Income Some states tax retirement income, while others don’t. Be aware of the tax laws in your state and plan accordingly for any state tax liabilities on pension or retirement account withdrawals.

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Tax Impact of Selling Investments If you sell stocks, bonds, or other investments in retirement, be mindful of the capital gains tax implications.

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1. Be Aware of Taxable Inheritances Inheritances themselves are not taxable, but income generated from inherited assets, like interest, dividends, or capital gains, may be. Make sure to account for any income derived from inherited assets when filing your taxes.

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