2019-03-01 Money

Tax Guide

You’re a

2019

48 MONEY.COM MARCH^2019

Retiree

WHAT CHANGED?

The Tax Cuts and Jobs Act didn’t take direct aim

at retirees, so don’t expect any change to, say,

the taxation of your Social Security benefits or

your required minimum distributions. Some of

the law’s provisions, however, disproportionately

affect older adults. Perhaps the biggest is the

medical deduction. Nearly 9 million Americans

deducted medical expenses in 2015, and nearly

three-quarters of them were older than 50,

according to an analysis by the AARP Public

Policy Institute.

For 2018, tax law lowered the threshold for

writing off your medical expenses to 7.5% of

your adjusted gross income, from 10%. But that

lower level expired last year, and for 2019, it’s

going back up to 10% for taxpayers of all ages in

order to write off qualifying medical expenses.

KNOW YOUR

COSTS

Don’t assume that

you’ll never be able to

claim this deduction.

Make sure you’re fa-

miliar with all the pro-

cedures and services

that can qualify for a

medical write-off. You

can find them in IRS

Publication 502.

Qualifying home im-

provements like, say,

a wheelchair ramp,

are an area that many

retirees frequently

overlook.

BUNCH

YOUR COSTS

If you don’t consis-

tently incur high

enough medical ex-

penses in a given year

to write them off, con-

sider bunching your

spending so that you

can at least take the

deduction one year.

That means, for

example, scheduling

qualifying elective

surgery, the purchase

of new hearing aids,

and a home improve-

ment for the same

year.

HOW TO

File

for Free

Most of the big tax-

software companies

now have a free op-

tion for federal in-

come tax filing.

The TurboTax Free

Edition covers W-2

income as well as the

Earned Income Tax

Credit and the

Child Tax Credit,

while a previous in-

come threshold of

$100,000 has been

eliminated, according

to Lisa Greene-Lewis,

CPA and tax expert

for TurboTax.“New

this year, we have free

data transfer for ex-

isting customers, and

new customers can

upload pdfs no matter

how they filed their

taxes before,” making

it easier if you’re

switching providers,

she adds.

For its part, H&R

Block offers online

users a free filing tool

that is also simple to

use. Both TurboTax

and H&R Block now

let you upload your

W-2 via your mobile

device by snapping a

picture of it.

Anyone who earns

less than $66,000

can also use the IRS

Free File portal, which

is a partnership be-

tween the agency and

top private tax-prep

software companies.