Hello, I’m Jeremy from TurboTax with some tax tips for retirees. Now that you are retired and enjoying life, the last thing on your mind is likely to be your federal income tax. But there are still ways you can minimize the amount you owe each year. It’s likely you receive monthly social security benefits. But did you know that it is possible for the IRS to tax some of those payments. This only happens if the other income you receive is too high. Generally, if all your other income plus 50 percent of your social security benefits exceed a certain threshold for your filing status then you will end up paying some tax on your benefits. If you do pay some income tax on those benefits, there are other things you can do to limit the impact of those taxes. One option is to find some tax-exempt investments to replace some of the taxable ones you own. This way you reduce your overall tax and can possibly keep your social security benefits in lower tax brackets. An example of this type of investment is state and local municipal bonds. The interest you earn on those bonds are exempt from federal tax.
And, in some cases it may also be exempt from state income tax. One other way to reduce your tax liability is by claiming the tax credit for the elderly and disabled. As long as you are at least 65 years old, file a joint return if married, and meet other income requirements it can be a valuable tax reduction tool. For more tax tips and guidance, visit TurboTax.com. .
As found on YoutubeRead More