| Increased standard deduction | | | | or accounting professional. They can help you weigh |
| If you are over the age of 65, or have gone blind | | | | the pros and cons of the conversion. |
| before the end of the year, then you are entitled to a | | | | Do not forget your winnings |
| higher standard deduction. But remember, if you take | | | | Some retired taxpayers get in to trouble with the IRS |
| the standard deduction you will not be able to itemize | | | | for having too much fun at the casino without telling |
| your return. | | | | Uncle Sam. Do not forget that gambling winnings are |
| Social security taxes | | | | forms of taxable income. You will need to pay taxes |
| Whether you owe taxes on your social security | | | | on the winnings even if your next bet is a big loser. |
| benefits depends entirely on your income level, and | | | | Medical expenses |
| income types. If social security benefits have been | | | | If you itemize your deductions, then the IRS will allow |
| your only form of income and will continue to be, you | | | | you to deduct dozens of medical expenses. But |
| will most likely not need to pay taxes or file a Federal | | | | remember, the IRS only allows you to claim the |
| income tax return. However, before deciding to pay | | | | medical expenses that exceed 7.5% of your adjusted |
| income taxes or not, it is probably a good idea to get a | | | | gross income. Thus, make sure to keep track of all |
| second opinion from a tax professional. | | | | your expenses throughout the year to qualify for the |
| Required minimum distribution (RMD) | | | | largest deduction possible. |
| Retirees who are 70 1/2 or older in 2009 get the | | | | Stock losses |
| added bonus of the new tax law which has relaxed | | | | Millions of people have taken losses in the stock |
| the mandatory minimum withdrawal from IRA’s. | | | | market lately, and many retired senior citizens are |
| Until now, retired individuals had no choice but to take a | | | | having the same problem. If you claim your stock |
| yearly mandatory withdrawal from their IRA, even if | | | | losses now, they can later be used to offset your |
| they did not need it. However there is a new | | | | gains. In addition to this, you can deduct up to $3,000 in |
| one-time-only law that takes away this requirement for | | | | capital losses a year against ordinary income. Any loss |
| the 2009 tax year, which is expected to protect | | | | remaining can also be carried forward into future |
| retirees from being forced to lock-in large investment | | | | years to be used until it is depleted. |
| losses from the past year. | | | | Seek professional advice |
| Roth IRA benefits | | | | With constantly changing tax codes, it can be difficult |
| Unlike taxable payouts from traditional IRAs, a Roth | | | | for even the most up to date professional to stay on |
| IRA is tax-free, making it especially useful if you have | | | | top of every change in tax law. To be absolutely sure |
| no other source of income. You can even switch a | | | | you are taking advantage of every deduction and |
| traditional IRA to a Roth IRA in what is known as a | | | | credit you can, you might want to consider hiring a tax |
| Roth conversion. You will have to pay taxes the year | | | | professional to help you prepare your taxes. For those |
| you convert, but it could be beneficial to you in the long | | | | of you who cannot afford to hire professional help, |
| run. If you are seriously considering a Roth conversion, | | | | Tax Counseling for the Elderly provides free tax |
| then I highly recommend you speak with a qualified tax | | | | advice to seniors 60 years of age and older. |