February 26th, 2017 12:19 AM by Sharon Mason
Top 3 Tax Write-Offs for Retirees
Tax time is here and if you are a semi-retired older adult or an Arizona retiree, it’s important to understand and take advantage of the deductions available to reduce your income taxes each year. Current research indicates that individuals are likely to make errors when preparing their tax returns. Here are the top 3 tax write offs for retirees you don’t want to forget.
1.) Retirement plan contributions: Older adults and Arizona retirees over fifty have higher contribution limits for traditional IRAs, Roth IRAs, and 401(k)s. Even though you pay taxes on the income you contribute now, the withdrawals upon retirement are tax-free with no tax needed to be paid on all the interest or other income earned by your Roth IRA investments.
2.) Charitable contributions: Giving back never looked so good! Charitable contributions are deductible as itemized with cash contributions of up to fifty percent of your adjusted gross income being deductible each year as an itemized deduction. If you donate property other than cash to a qualified organization, you may generally deduct the fair market value of the property. If you donate a car your deduction generally is limited to the gross proceeds from its sale by the charitable organization.
3.) Selling your house: Arizona retirees and semi-retired older adults will often sell their homes to downsize into smaller homes or Arizona retirement communities. If you've lived in your home for a long time, you probably have substantial equity and will earn a large profit on the sale. As long as you live in your home for at least two out of the five years before you sell your house, the profit you make on the sale is not taxable.
For more tips on tax write offs for retirees visit irs.gov. If you’re ready to sell your home, buy a new home, or relocate to a luxury Arizona retirement community, please contact me today! I can help you find the perfect home where you can enjoy your golden years!
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Disclaimer: I do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.