When Congress passed the new tax code on December 31, they made a few additions and updates that might affect your tax return – and your budget – for the next several years, and can take the worry out of preparing your 2012 tax return.
According to Roswell, Georgia CPA Robin McIntire, there were a couple of positive changes for Active Adults including IRA Distributions to Charity and Georgia Taxes for Retirees:
IRA Distributions to Charity – The American Taxpayer Relief Act of 2012 extended through December 31, 2013 the provision allowing tax-free distributions from IRA accounts to public charities. They can be made by individuals age 70 ½ or older and can be up to a maximum of $100,000 per taxpayer, per year. The act provides special transition rules. One rule allows taxpayers to re-characterize distributions made in January 2013 as made on December 31, 2012. The other rule permits taxpayers to treat a distribution from the IRA to the taxpayer made in December 2012 as a charitable distribution, if transferred to a charity before February 1, 2013.
Georgia Taxes for Retirees – Taxes on retirement income for those 65 and older will start to be phased out as the 2012 exemption for that age group climbs to $65,000 per taxpayer. It will rise to $100,000 for 2013, $150,000 for 2014, and $200,000 for 2015. By 2016, taxes on retirement income for those 65 and older will be eliminated completely.
Other items that individuals over the age of 50 will want to keep track of include medical expenses, many of which are deductible. Those may include health insurance premiums – including Medicare premiums, long-term care insurance premiums, prescription drug costs, nursing home care costs and other out-of-pocket health care expenses.
And since many Boomers start their own businesses in retirement, they should keep track of business expenses, many of which may be deductible.
Finally, expenses and income from the sale of a home may affect taxes refunded or owed.
Check with your tax-preparation professional to ensure all expenses, deductions and income are properly reported, which will help alleviate tax-related headaches later.
Of course, living in a Windsong Active Adult community prevents everyday headaches associated with home maintenance and adjusting to the retirement lifestyle. With spacious floor plans designed for luxury, easy access and maneuverability, plus materials that reduce some of the most common maintenance issues, your retirement might just be the stuff the brochures had in mind!
Welcome home to Windsong – Where Life’s A Breeze!
Contact information for referenced source:
Robin R McIntire, CPA