Tax Time—it’s one of those phrases that strikes fear in the hearts of even the strongest among us. It can send one spouse scurrying for cover while the other gathers and organizes tax documents. And vile words not heard during the rest of the year have been known to escape from the lips of people you’d never expect to use such language.
Tax time for Seniors can be unique and challenging because of the various types of income they have to report—Social Security, a pension, annuities, 401(k) withdrawals, IRA Required Minimum Distributions (RMD), or even the sale of a home if they downsize or move into a retirement community.
Fortunately, there are free resources available to help older Americans make sure they’re tax return is prepared properly and they don’t raise any red flags at the IRS. One of the favorites used by some of my clients over the years is the AARP Tax Aide.
AARP Tax Aide
The AARP Foundation created a nationwide network of free in-person and virtual tax preparation services, focusing on people age 50 and up and taxpayers with low to moderate income.
The people who help with tax preparation are IRS-certified and in many cases are retired accountants and CPAs who donate their time. They can help prepare state and federal returns but there are some things they won’t help with:
- Rental property income
- Farm income
- Moving expenses
- Casualty and theft losses
- The Alternative Minimum Tax
- Losses from a self-employment business
You don’t have to be an AARP member to get help from Tax Aide. You can use this locator to find an AARP Tax Aide site near you.
Tax Counseling for the Elderly (TCE)
For 45 years, Tax Counseling for the Elderly has been providing basic tax return preparation for people 60 years old and older. The IRS provides funds to various community organizations, such as the United Way. Volunteers involved in tax preparation are required to pass tax law training that meets or exceeds IRS requirements, and includes issues specific to Seniors, things like Social Security income, pensions, and required minimum distributions from retirement plans and IRAs.
You can find a TCE site by calling 800-906-9887 or going to the TCE locator tool.
Volunteer Income Tax Assistance (VITA)
Another free tax service funded by the IRS is the Volunteer Income Tax Assistance program. It’s similar to TCE, but there is no age limit on who can use the service. However, priority is given to:
- People who make $60,000 or less
- People with disabilities
- Taxpayers who speak limited English
For people who prefer to do their own taxes but want guidance, you can used VITA’s web-based tax preparation software. IRS-certified volunteers are available to answer questions and help you through the process.
You can find the nearest VITA location to you with this location locator.
IRS Free File
Another free service with IRS involvement is IRS Free File. Unlike TCE and VITA, which are administered by nonprofits, IRS Free File is a partnership between the IRS and companies that provide free online tax prep and filing software. It’s available to taxpayers with adjusted gross income of $73,000 or less.
The IRS has a list of IRS Free File providers or you can use the Online Lookup Tool.
No matter which service you use, there are some basic documents/records you need to have with you.
- Income statements, including W-2s
- Form SSA-1099 for Social Security benefits
- Form 1099-R for pension, IRA and/or annuity income
- Form 1099-R for disability income (if applicable)
- Income from other all other sources, such as 1099-INT for interest income
- Mortgage statements and property tax bills if you’re a homeowner
- Contributions made to a retirement account or health savings account
- Social Security card
- Government-issued state ID or driver’s license
- Tax returns from the previous two years
- Any communication from the IRS
- Checking or savings account information for direct deposit
Tax time is never fun. Hopefully, one of these free services will make it a little less traumatic.