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Beacon Senior News

2022 tax season filing tips for seniors

Feb 25, 2022 11:32AM ● By Marianne Hering

You may be working in the same career, switching to a different job or adjusting to retirement, but regardless of your employment status, it’s tax season. Unlike last year, we will not get extra time to file—so it’s time to gather your documents and get to it! To help you prepare, tax expert Kate Bell answered some pertinent tax questions.

Q: What should I know about the Recovery Rebate Credit for 2021 filing?

A: Did you receive the third economic impact payment (also called the recovery rebate credit that arrived between March 2021 and December 2021) of $1,400 per eligible household member? The IRS is sending out Letter 6475 to taxpayers who may not have received the proper amount. The IRS could have this amount wrong, so verify the amount you and your family received before entering it in your tax return.

Q: What life events may affect my taxes?

A: Did you buy or sell a house, move, retire, start a business, take care of a dependent, become dependent, change banks or close a brokerage account? All these events can affect your filing or the amount you owe. 

Q: What is the best way to file?

A: E-filing and direct deposit are still the fastest way to get your taxes filed and receive your refund. Because the IRS has a backlog of around 6 million paper returns from last year, filing on paper will cause delays with your refund. Note: There are many “free” sites for e-filing federal returns, but you may be charged a fee for state filing.

Q: When are taxes due?

A: Here’s that info direct from IRS.gov: “For the 2021 tax return, the due date is April 18, 2022, because of the Emancipation Day holiday in Washington, DC. Taxpayers in Maine and Massachusetts have until April 19, 2022 because of the Patriots’ Day holiday in those states.” Extensions can be requested, but you still need to estimate what you owe and pay it by the April deadline for your state.

Q: I started my own business in 2021. What do I need to know?

A: Depending on the type of business, you’ll most likely need to fill out a schedule C. In general, you should track expenses and income, and then pay estimated taxes. You would do best to consult with an enrolled agent for specifics on which expenses you should be tracking. For example, if you began as an Uber driver, you should track mileage, fuel, mechanical expenses and parking fees. You will need to decide during the first year a car is put into service if you will take standard mileage, or if all the expenses of the vehicle are for work. 

Q: What tax benefits are retirees entitled to?

A: Colorado allows a pension/annuity subtraction for two groups: 

• Taxpayers who are at least 55 years of age as of the last day of the tax year. 

• Beneficiaries of any age (such as a widowed spouse or orphan child) who are receiving a pension or annuity because of the death of the person who earned the pension.

What are those subtraction amounts?

• Qualified taxpayers who are under age 65 as of the last day of the tax year can subtract the smaller of $20,000 or the taxable pension/annuity income included in federal taxable income.

• Taxpayers who are 65 years of age or older as of the last day of the tax year can subtract the smaller of $24,000 or the taxable pension/annuity income included in federal taxable income.

For more information, review the FYI Income 25 guidance publication at https://tax.colorado.gov

Q: What tax benefits are retired military service members entitled to?

A: A retired service member may claim one of two subtractions for all or part of the military retirement benefits that are included in their federal taxable income. The subtraction that may be claimed depends on the retired service member’s age at the end of the tax year. For more information on these subtractions, visit the Retired Servicemembers web page and review guidance publication FYI Income 21 publication at https://tax.colorado.gov. 

Q: I’m a retired railroad employee. What should I know about my taxes?

A: Here’s an answer straight from the state tax code: “Federal law exempts railroad retirement benefits from state income taxes. The railroad retirement benefits subtraction is allowed on the Subtractions from Income Schedule (DR 0104AD) for any railroad retirement benefits reported on Form RRB-1099 or Form RRB-1099-R and included in a taxpayer’s federal taxable income.” For more information, review FYI Income 25.

Q: What can I do to ensure accuracy?

A: Save a copy of all your tax returns and the supporting documents. These can help you review for next year and correct any discrepancies. The IRS has three years to let you know if they found any issues. 

Q: I have a complex return. Where can I find help?

A: Taxpayers with more complex tax returns should contact an enrolled agent, which means this provider has been tested by the IRS for certification.

To ensure your tax preparer is enrolled, visit IRS.gov and search for the “active enrolled agents listing.” The list is organized by state and then by alphabetical last name of the agent. 


Free tax help for qualifying seniors

Free tax preparation

AARP Tax Aide provides free tax assistance. Appointments are required. Bring picture IDs, Social Security/ITIN cards, last year’s tax return and all documents to accurately complete your return, including letters from the IRS if you had identity theft, receipt of the economic impact funds, or the letter 6419 if you received Advanced Child Tax Credit payments.

Mesa County

Call 970-589-3789 or 970-210-5705 or go to www.cotaxaide.org/appt to schedule online. All taxes are prepared at Wells Fargo, 359 Main St. in Grand Junction, from 9 a.m.-2 p.m. Monday through Saturday. 

Montrose

Call the Montrose Pavilion Senior Center at 970-252-4889 to make an appointment. All taxes will be prepared at the Montrose Senior Center, 1800 Pavilion Drive.