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1. Taxes
can make or break retirement. Taxes on a home in a metropolitan
area can be $3,000 to $10,000, while a similar home in a more rural or
small-town setting might be $700 to $1,500.There is not an easy way to
determine tax rates for the thousands of communities in the US. They
vary widely. And if the real estate taxes are low, chances are you may
pay dearly in some other way. And if ALL taxes seem low, check on the
services available. These things must be paid by some source of
revenue.
Find communities that have what you want, then call Realtors and ask
about the property taxes on an average house like the one you will be
buying. |
| 2.
Some states tax certain
retirement income, while others like Pennsylvania do not. Sales
taxes can range from nothing to over 8%. Some states tax food and
clothing, and others do not. |
| 3.
Compare various taxes in
every state. SeniorArk internal pages. |
| 4. Find out
the details on any homestead
exemptions in your state. This is a tax reduction based on the
property being your primary
residence. I lived in my last house for 12 years not knowing I
could have paid less if I had applied for this. In some states the
homestead exemption for Seniors is quite sizable. |
| 5. In many
states you will not have to pay sales tax on items that are
purchased from, and installed permanently in your home
by the same company.
For example, in Pennsylvania if you purchase a hot water tank from
Sears, and Sears installs it for you, you will pay no sales tax on the
tank or installation. If you purchase the tank and you and a friend
install it, you must pay sales tax on the tank. At some businesses,
you must educate them on this savings. It is easier for them to just
collect the tax than deal with the exemption.
The revenue office of your
state will be able to tell you if this applies where you live. |
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6.
Beware of emails that claim to
be from the IRS, wanting to refund you some piddly (under $100)
amount by crediting your bank/credit card account and requesting the
account number. The IRS DOES
NOT refund money this way!! They always send a check. These
emails are scams. Don't fall for them! In fact, if you get one,
forward it to
phishing@irs.gov, so they can nail the scammers.
Remember.. if it sounds too
good to be true, it probably is! Rivahcat, Virginia |
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7. The IRS has arranged for
FREE online tax filing
for those with incomes below $50,000.
This is the place to begin. |
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8.
Get free online
IRS Federal Tax Forms and instructions |
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9.Don't automatically accept that you
are paying the correct amount of real estate taxes. A little time
and research can save you big bubks for years to come.
10 ways to get your real estate taxes reduced |
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10.
A mismatch between a name and
a Social Security number on a tax return could mean costly problems.
At best, it could slow down a refund. At worst, it could unexpectedly
increase a tax bill. A couple of years ago, the Internal Revenue
Service stopped putting taxpayer Social Security numbers on the tax
package labels. Privacy advocates were concerned that this information
could be too easily used by others. Unfortunately, the IRS found that
removing it also meant that taxpayers forgot to write in their
identification numbers on their tax returns. So it's now up to you to
fill in your Social Security number, as well as any others required on
your return and associated schedules. |
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11.
Having trouble paying your tax bill? The IRS offers several
different ways to remit what you owe. |
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12. You've been saving diligently for
your retirement, but now you need some of that cash to cover today's
expenses. Can you get to it without incurring Uncle Sam's tax wrath?
In some instances, the answer is yes.
IRS rules for early IRA withdrawals |
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13.
If you turned 70½ last year and haven't yet started spending what
Uncle Sam thinks you should, on April 1 you have to take an
IRS-specified amount out of your retirement account, even if
you're still working. This withdrawal, known as a required minimum
distribution, must come out of retirement savings where taxes have
been deferred. This includes several popular IRAs -- traditional,
simplified employee pension, or SEP, and SIMPLE accounts -- as well as
certain employer-sponsored plans. It's no secret why the IRS wants you
to start drawing down these accounts. Your money sat there for years,
tantalizingly out of reach of the tax collector as it accrued
tax-deferred earnings.
full story |
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14.
State-Local Tax Burdens, Year 2005
Senior Ark internal
page |
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15. Check the property taxes on
similar homes in your
neighborhood. If yours seem unjustified consider an
appeal. In some
communities an appeal usually results in a reduction. Make sure
you are not already below nearby prevailing rates. Your jurisdiction
will have instructions on how to file for an appeal. |
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16.
You will be hearing a lot
about a great American tax break in 2006. Don't be fooled. It
is called the "death
tax" for effect.
ONLY 2% OF AMERICANS COULD
POSSIBLY BE AFFECTED BY THE REPEAL OF THIS TAX. And there are
ways to minimize the impact of this tax if you ARE in the 2% group.
I believe we have been witnessing the
greatest redistribution of
wealth from the lower and middle classes , to the upper
classes, that we have ever seen in our history. This is another
"break" we do not need. |
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17.
Does Charity Car Donation Still Make
Sense Under Tougher IRS Rules? |
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18.
You can get a $500 tax
credit ( Better than a tax deduction ) on certain
energy saving purchases between January 2006 and December 2007. Get
details at::
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#chart |
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19. On tax matters, I checked with the
Centers for Medicare and Medicaid Services and the IRS to find out
whether Part D premiums and
other Part D expenses, most of which were incurred for
the first time in 2006, are
tax deductible. They are. But too often we forget to include
out-of-pocket Medicare Part A, B, C and D expenses among our medical
deductions.That would include the 2006 Part B monthly premiums ($88.50
for most people).
You also may include the Part
A and B deductibles, ($952 and $124, respectively) and Medicare
and Part C Medicare Advantage (HMO) co-pays and any other
out-of-pocket medical expenses.
In order for any of that money to be returned to you in the form of a
tax deduction, however, your
expenses must exceed 7.5 percent of adjusted gross income.
Premiums paid for Medigap policies, COBRA or your costs for
supplementary coverage from a current or former employer, as well as
expenses for travel to and from doctors, also count toward your total
in determining deductibility. Saul Friedman, Newsday.com January
6, 2007 |
20.
Social Security and You: Benefit statements are easy to
replace
I understand that I should have already
received my SSA-1099 so I can complete my income tax return. I must
have misplaced it. How can I go about getting another one? |
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21. Finding the
cheapest place to retire means more than cutting expenses, you need to
beware
of the tax climate. Not
every state will be an affordable place to retire. Forty of the 50
states give a variety of tax breaks to retirees. Seven have no state
income taxes for all residents, and
eight gave property tax relief
to homeowners over 65. Fourteen give homestead exemptions to
all homeowners. Most states will allow you to deduct some portion of
your government, military or private pension when calculating your
income tax. See Taxes by State.
Also see the expanded section on
tax rates favorable to seniors
in Pennsylvania. |
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22.
See how your state
ranks in taxes in the 2007 assessment done by the Bureau of
Economic Analysis, Census Bureau and Tax Foundation. |
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23. The Federal US Government may tax
some of your Social Security benefits. Here is a link to the official
IRS publication #915,
explaining that possibility. |
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24.
IRS: Beware 12 Worst Tax
Schemes :
March 13, 2008 |
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Seniors are
waiting for your tip here.
Or submit a
useful link for a links section. |