How much do the elderly typically receive in tax refunds?
What does an elderly person with only social security and maybe a pension get back on their tax refund? Is it minimal? What about their health-care expenses not covered by medicare?
I’m not talking elderly people like Warren Buffett, but your average retirement age person with little discretionary income.
What about the permanently disabled? Anything different in terms of refund amounts from the elderly?
Do the elderly and disabled even have to file taxes?
Does it beehoove them to do so anyway, even if they dont have to file?
Tagged with: discretionary income • elderly person • health care expenses • medicare • retirement age • social security • tax refund • warren buffett
Filed under: Presbyopia
I am going to answer your questions based on a single person age 65 or older.
What does an elderly person with only social security and maybe a pension get back on their tax refund? Is it minimal?
If the person has only Social Security, he owes no taxes and do not have to file a tax return. If the person has a taxable pension of more than $10,450 he has to file a tax return. If his pension income plus half of the Social Security is more than $25,000, some of his Social Security is included in his tax return. These benefits are taxed and also may raise the tax rate for the individual.
The taxable pensions which in turn cause tax on SS benefits cause many elderly to pay significant taxes. They usually will only get a refund of excess tax withheld.
What about their health-care expenses not covered by medicare?
The elderly can take the same medical deductions as others. The tax benefit is available only when the unreimbursed medical expenses exceed 7.5% of the adjusted gross income. Medicare Part B and Part D, long-term care insurance, and supplemental health insurance are all deductible expenses.
What about the permanently disabled? Anything different in terms of refund amounts from the elderly?
The process is basically the same for disabled receiving SS benefits. A blind person can take an additional $1,100 standard deduction.
Do the elderly and disabled even have to file taxes?
Yes, there is no exemption from the filing requirements for elderly or disabled. There is only a small increase in the amount of income needed to require a tax return, in the case of persons over age 65 or blind (an extra $1,100).
Does it beehoove them to do so anyway, even if they dont have to file?
Very low elderly or disabled my file to get a small credit for the elderly and disabled. This is a few hundred dollars and it is rare to find a taxpayer who qualifies for this credit.
wait,how many questions are you asking?
They get nothing. You must work and pay taxes to get any back.
People, elderly or not, do not necessarily "get back" anything as a refund. Health care expenses not covered by insurance are paid for out of pocket – again, elderly or not.
Elderly folks of modest means often are not required to file returns. If they do file, they may have a refund or owe, depending on whether or not they have money withheld or pay estimated tax during the year.
Retired people do not get EIC or the additional child tax credit. Thus if they file a tax return and get a refund, it’s because they sent too much money in.
*sigh* I just noticed this is the guy who plans to make a fortune opening up a tax preparation service. Geez. You don’t know when and why a retiree would need to file, yet you expect to do their returns.
Usually no refund and don’t owe anything, for most of the retirees I see, since most don’t have enough income to owe anything so don’t have anything withheld – many don’t even have to file federal returns, but might have to file state returns, or come in to have a property tax rebate form filled out (Pennsylvania). Those with healthy pensions, and maybe IRA or 401K withdrawals and investment income, tend to have tax liability – some of those have too much withheld and get a refund, probably more of them owe a usually small amount.
People on ss, either disability or retirement, don’t have to file if that’s their only income, or if they have minimal other income, and there would be no benefit to filing.
Many elderly people owe no taxes and pay no taxes. You only get a tax refund when you overpay. They’re not overpaying, so they won’t get anything back anyway.
Some elderly people like to file even though they’re not required, just so they have hard proof. But many don’t get refunds.