We got a few days’ reprieve this year. Instead of tax day being on the usual April 15th, this year’s taxes are due on Monday, April 18th. For those of you who like to leave things until the last minute, you’ll have this coming weekend to gather your various statements, take out your calculator and figure out this year’s tax obligation. And if you suddenly find yourself drowning in a sea of paperwork (or anxiety), there are some resources (even at the last minute) available to help older adults with their taxes. 

The IRS itself offers free tax assistance with its VITA (volunteer income tax assistance) program and its TCE (Tax Counseling for the Elderly) program. To find out whether either of these programs is locally available to you, click here. You generally have to qualify for this assistance, either due to your income level, age or disability. While it practically may be too late for the April 18th deadline, you should also be aware (if not for now then going forward) that AARP offers free tax preparation every year from Feb. 1 through Tax Day through its AARP Foundation Tax-Aide Program, which is usually available to low and moderate-income individuals who are at least 50 years old. This help is available by appointment only. To find out more, grab your bag of receipts and read here.

For older adults, tax obligations are often surprisingly larger than you might expect, depending on your sources of income. While you may not be earning a salary, if you have money coming in beyond your Social Security benefits, that income may push you into a tax bracket you didn’t expect, possibly leading to the taxation of at least part of your benefits. About 40% of Social Security recipients do end up paying taxes on at least part of their benefits. Furthermore, there are 13 states that will separately tax your social security benefits on the state level as well. So just when you may have thought things would get easier, it’s important to understand where your tax burdens may be. Whether you will pay taxes on your Social Security benefits depends upon your “provisional income.” 

In 1984, as part of a reform package to stabilize the Social Security system, legislation was passed to enable taxation of a certain amount of Social Security benefits. The revenue generated by this taxation is credited to the Social Security and Medicare trust funds. Whether you will owe taxes on your benefits depends upon whether you file individually or jointly, and depends upon your provisional or combined income for the year. So, if you are an individual filer, and earn $25-$34,000/year, you will be taxed on 50% of your Social Security benefits. Above $34,000/year, 85% of your benefits will be taxable. As a married filer, the 50% rate kicks in with income between $32,000 -$44,000 and above $44,000, 85% of your benefits will be taxable. When calculating your provisional or combined income, you need to account for any earned income (did you have a part-time job?), investment income, pension payments, or 401K or IRA withdrawals. Combined, it is possible that these sources could put you over the threshold amounts and land you in the position of owing taxes on social security. To find out more, click here.

Of course, determining whether you owe taxes and how much is always something you should discuss with your own informed professional tax advisor or accountant. For some general tips for this year from a tax professional, click here. Moreover, federal income tax is just one of the kinds of taxes you will need to consider in retirement. Each individual state has its own set of state income taxes that may or may not treat your retirement status favorably, in addition to the local sales and property taxes. This could help determine where you will land once you decide to retire. To find out your combined tax burden in each state, dig out your calculator and click here. And retirement itself will likely trigger some new taxes (or tax penalties) you previously did not pay, including the Required Minimum Distribution (RMDs) requirements for retirement accounts, possible Medicare penalties if you fail to sign up during the appropriate enrollment period and possible capital gains taxes if you begin to sell off investments to fund your retirement. So while you may picture a life of smooth sailing once you enter retirement, in fact, you may encounter some choppy waters as you navigate the tax maze that greets you. To find out more, grab a rope and read here.