LOUISVILLE, Ky. – According to the IRS, current research shows individuals are likely to make errors when preparing their tax returns. One way to avoid that is going to an AARP Foundation Tax-Aide site. Sites offer free preparation of basic income tax returns across the nation, including Kentucky, which can provide peace of mind. There is no age or income requirement, but the program also caters to low- to moderate income taxpayers who are 50 and older, and AARP membership isn’t required.
“Some of the math that you do on taxes is just crazy. Okay, more than you want to fool with, and it’s easy to make mistakes,” said Jim Tretter, who is a tax counselor for a few of the tax-aide sites in Louisville.
AARP membership isn’t required and volunteer tax counselors like Tretter are IRS-trained and certified.
“Most of them have senior issues. So it’s typically social security, pensions, retirement money, some of them have small jobs,” Tretter explained. He volunteers every tax season to give back to the community in his own retirement.
Some seniors may not know these tips regarding their taxes:
- Those 65 and older who don’t itemize their deductions can get a higher standard deduction.
- There’s an even higher standard deduction if an individual or their spouse is blind.
- Those under 65 may qualify for the Earned Income Tax Credit.
- Seniors need to be especially careful with calculating the taxable amount of social security.
“Gee, I withdrew money out of my IRA to pay [for] a new car. Okay, well it bumps up the taxable part of their social security, and people don’t see it coming,” Tretter said regarding one possible scenario.
Volunteer tax counselors like Tretter not only remove the headache of filing basic income taxes, but can also offer suggestions on how to reduce taxes further for seniors.
“If you take money out of your Traditional IRA and donate it directly to a charity, that money is not taxable,” Tretter said. According to the IRS, that is from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70 and a half or over that is paid directly from the IRA to a qualified charity.
The free service doesn’t file complicated returns or do property taxes, but Tretter tells everyone 65 and up about Kentucky’s Homestead Exemption for homeowners who are at least age 65 or totally disabled. Those who qualify get a $39,300 deduction from the home’s assessed value. So property is taxed only on the remaining value.
“And it saves people about $400 a year in their property taxes,” Tretter told Spectrum News 1.
After 15 years volunteering as an AARP Foundation Tax-Aide Tax Counselor, Tretter is a wealth of knowledge.
“All I want to do is make sure they are aware of what drives those numbers, and then they can make their own decisions,” Tretter said.
To find an AARP Foundation Tax-Aide site near you, visit this site. Make sure to bring these important documents prior to a visit.