Wayne Langley

As the annual United States tax-filing deadline looms near, many are scrambling to assemble their documents and get their returns filed on time. When a person is young, taxes always seem so simple, but as we age, and as our financial lives grow, taxes get more complicated. Children, mortgages, business expenses ­— they all play a factor in how much each of us pays to the government. Then, children move out, businesses get sold, and mortgages get paid off, leading people to believe that their taxes just got a bit easier. Don’t be fooled! Boomers and seniors can be missing out on some major tax benefits by taking the simple way out and paying less attention to their filings.

According to the Tax Policy Center, filers over the age of 65 are the largest single group to benefit from special provisions of the federal tax code. Some people refer to these provisions as “loopholes,” but they’re not! They are built into the tax code to specifically help aging adults that may not have a large or stable income as they exit the workforce.

Everyone has heard that they should pay a professional to do their taxes because they will get more money back. However, the expense of the professional may cut into those returns severely, especially for low to moderate-income households. For Boomers and seniors, there are government programs that will provide professional tax preparation at little to no cost. One such program, titled VITA, offers free tax help to people who make less than $52,000 and need assistance in preparing their return. Additionally, there is the TCE program that provides free tax help to people over 60. This program specializes in help with retirement investments, such as pensions and 401(k)s. For retirement communities, these programs can be especially helpful to residents and their families. Encourage your residents to take advantage of VITA and TCE, and provide a place for individuals to meet with the volunteers during tax season. Ensuring residents are financially stable is critical to keeping them in your community.

Specialized tax credits are also important for the Boomer and senior population. The Elderly and Disabled Tax Credit is probably the most well-known, but it requires the use of a 1040 form (as opposed to the 1040EZ) to receive it. If the filer, or his or her spouse, is 65 years or older or is under 65 and permanently disabled, he or she could qualify. The only catch is income level, which varies on how someone files. The maximum yearly income allowed is $25,000 for those that are married and file jointly, and both must qualify. While this does limit the number of people who qualify, nonprofit communities that provide mission-based services may have many residents that could take advantage of this program.

Having tax specialists present at lead-generating events and resident gatherings isn’t new. By doing so, the community provides information to potential residents that helps them understand their ability to retire. It also benefits the tax professionals, as they gain clients. It’s an idea that has worked in many instances, but what can you do to freshen it up?

Instead of inviting just one professional, how about asking several — all specializing in different fields — to attend? Having a “finance fair,” with a wide range of experts, could be a great draw. If you’re working with a higher-income bracket of potential residents, have an “investment symposium” that concentrates on issues relating to larger investment accounts. Both of these can be great ways to generate warm leads for your marketing strategy.

Helping your residents and potential residents understand tax issues is in your best interest. It can keep current residents in your community and aid potential residents in understanding how affordable life can be by retiring with you. Connecting these groups to tax preparation resources isn’t just a kind-hearted move; it’s a fiscally responsible one that has real-world benefits for everyone involved.

Sources:

http://www.taxpolicycenter.org/publications/why-some-tax-units-pay-no-income-tax