Tax Guide  for Seniors

taxmap/pubs/p554-000.htm#TXMP2f584229 What's New(p1)

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Standard deduction.(p1)

For most people who do not itemize their deductions, the standard deduction is higher in 2007 than it was in 2006. See Standard Deduction, later.

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Exemption phaseout.(p1)

You lose part of the benefit of your exemptions if your adjusted gross income is above a certain amount. For 2007, the phaseout begins at $117,300 for married persons filing separately; $156,400 for single individuals; $195,500 for heads of household; and $234,600 for married persons filing jointly or qualifying widow(ers). However, beginning in 2007, you can lose no more than 2/3 of the amount of your exemptions. In other words, each exemption cannot be reduced to less than $1,133.

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Expiration of relief granted for Hurricane Katrina.(p1)

The following tax benefits for taxpayers affected by Hurricane Katrina have expired and do not apply for 2007.

• Exclusion from income for discharge of nonbusiness debt.
• Additional exemption amount for housing a person displaced by Hurricane Katrina.

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Earned income credit.(p2)

The maximum amount of income you can earn and still get the credit has increased. You may be able to take the credit if you earn less than:

• $12,590 ($14,590 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65,
• $33,241 ($35,241 if married filing jointly), and have one qualifying child living with you, or
• $37,783 ($39,783 if married filing jointly), and have more than one qualifying child living with you.

For more information, see Earned Income Credit, later.

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Insurance premiums for retired public safety officers.(p2)

If you are an eligible retired public safety officer, you can elect to exclude from income distributions made directly from your eligible retirement plans to pay premiums for certain insurance. See Insurance Premiums for Retired Public Safety Officers, later, under Pensions and Annuities.

taxmap/pubs/p554-000.htm#TXMP078adca7 Reminders(p2)

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Tax return preparers.(p2)

Choose your preparer carefully. If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Remember, however, that you are still responsible for the accuracy of every item entered on your return. If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due.

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Hurricane tax relief.(p2)

Special rules apply to the use of retirement funds (including IRAs) by qualified individuals who suffered an economic loss as a result of Hurricane Katrina, Rita, or Wilma. While qualified hurricane distributions can no longer be made, special rules apply to the repayment of these distributions. See Hurricane-Related Relief in Publication 575, Pension and Annuity Income, and in Publication 590, Individual Retirement Arrangements (IRAs), for information on these special rules.

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Third party designee.(p2)

You can check the "Yes" box in the Third Party Designee area of your return to authorize the IRS to discuss your return with a friend, family member, or any other person you choose. This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. It also allows your designee to perform certain actions. See your income tax package for details.

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Employment tax withholding.(p2)

Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits.

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Voluntary withholding.(p2)

You may be able to have federal income tax withheld from your social security and equivalent railroad retirement benefits. See Tax Withholding and Estimated Tax under Social Security and Equivalent Railroad Retirement Benefits, later.

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Photographs of missing children.(p2)

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

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Introduction

The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. The publication will help you determine if you need to file a return and, if so, what items to report on your return. Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it.

Table I has a list of questions you may have about filing your federal tax return. To the right of each question is the location of the answer in this publication. Also, at the back of this publication there is an index to help you search for the topic you need.

While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. The following are some examples.

• Higher gross income threshold for filing. You must be age 65 or older at the end of the year to get this benefit. You are considered 65 on the day before your 65th birthday. Therefore, you are considered 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.
• Higher standard deduction. If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered 65 at the end of the year if your 65th birthday is on or before January 1 of the following year.
• Credit for the elderly or the disabled. If you qualify, you may benefit from the credit for the elderly or the disabled. To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled, later.

taxmap/pubs/p554-000.htm#TXMP1570eab5 Return preparation assistance.(p2)

The IRS wants to make it easier for you to file your federal tax return. You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you.

taxmap/pubs/p554-000.htm#TXMP01281a50 Volunteer Income Tax Assistance and Tax Counseling for the Elderly.(p2)

These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. For the VITA/TCE site nearest you, contact your local IRS office.

For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. When asked, be ready to press in or speak your 5-digit ZIP code. Or, you can visit their website on the Internet at www.aarp.org/taxaide.

taxmap/pubs/p554-000.htm#TXMP51236875 Comments and suggestions.(p2)

We welcome your comments about this publication and your suggestions for future editions.

You can write to us at the following address:

 
Internal Revenue Service 
Individual Forms and Publications Branch 
SE:W:CAR:MP:T:I 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

You can email us at *taxforms@irs.gov. (The asterisk must be included in the address.) Please put "Publications Comment" on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.

taxmap/pubs/p554-000.htm#TXMP0c15e625 Ordering forms and publications.(p3)

Visit www.irs.gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 business days after your request is received.

 
National Distribution Center 
P.O. Box 8903 
Bloomington, IL 61702-8903

taxmap/pubs/p554-000.htm#TXMP75ba833d Tax questions.(p3)

If you have a tax question, check the information available on www.irs.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

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