As the April 18 tax filing deadline nears, help is on hand for Atlanta’s older adults who have yet to complete this yearly task.
The AARP Foundation Tax-Aide program has volunteers set up throughout the metro area to provide assistance — from the review of materials to the actual electronic filing of state and federal taxes.
Paul Engle, 73, a program volunteer for the past 17 years, said the work is gratifying because he knows he’s helping.
“When they walk out after spending some time with us, their tax return is finished, and they don’t have anything to do other than, if they owe money, make sure they pay the money,” he said. “You see the smiles on the faces and the relief of the people.”
Tax-Aide volunteers can assist a variety of people, but they focus specifically on older filers.
“Our primary focus (is) seniors and lower-income seniors,” Engle said. “We cannot turn anybody away as long as it’s inside of our scope.”
Volunteers mostly help retirees, but they can assist some people who are still working and need to file Schedule C returns for businesses showing profits. Engle said he might see Uber and DoorDash drivers in these cases. Volunteers also come from various professional backgrounds.
Credit: Photo contributed by Paul Engle
Credit: Photo contributed by Paul Engle
“There’s a small number of people who actually have an accounting and/or tax background. Most of them have just an interest in volunteering, and most of the folks have done their own taxes for multiple years,” said Engle, who’s retired from IBM.
Volunteers receive annual training and certification from the IRS. There are around 60 Tax-Aide volunteers in Cobb County, Engle said — each one with an IRS-provided Chromebook.
“Our biggest contributor to the program is the IRS. The IRS loves it because, in a pre-pandemic year, we’d process about 3,500 returns in our county, and that’s a lot less paperwork for the IRS,” he said.
Volunteers with the AARP Foundation will be offering help through April 15. For a listing of locations, visit taxaide.aarpfoundation.org.
Adding up retirement income
Kirk Jarrett, the immediate past board chairperson of the Atlanta-based Georgia Society of Certified Public Accountants, has some pointers for older filers, including determining income amounts.
“Most all retirees have their income from Social Security benefits and generally from a deferred retirement account or an employer-sponsored retirement, such as an IRA, 401(k) or pension,” Jarrett said.
Other income, he said, typically includes savings or bank account interest, along with capital gains, money from rentals and interest and dividends from investment accounts. Railroad retirees, military veterans and postal workers also need to keep track of retirement income.
Social Security taxation
Retirees with Social Security benefits may see federal taxation on varying amounts of these funds.
“The threshold for paying tax on Social Security income is based on whether the taxpayer has other income typically from wages, self-employment income, interest or dividends from investments,” Jarrett said.
“Once the person has at least $25,000 of income for an individual filer or $32,000 for joint filers, in addition to their Social Security benefits, they may pay tax on a minimum of 50% and up to a maximum of 85% of their Social Security income.”
Filers who have other financial streams can take steps to simplify the taxation process.
“The recipient may choose to have the federal income tax withheld from their Social Security benefits if they have the other income,” Jarrett said.
Exclusions and deductions
Georgia allows retirees to leave Social Security income out of their gross income calculations for state income tax. Once Georgia residents reach 62, these state income retirement exclusions extend to dividends and interest, capital gains and royalties, annuities and pensions, along with net rental income, Jarrett said. The first $4,000 of retirees’ earned income also falls under the exclusions, he said, adding that Georgians ages 62 to 64 can exclude on their state returns as much as $35,000 in retirement income.
“Taxpayers under age 62 and permanently disabled also qualify for this exclusion,” he said. “Georgia taxpayers ages 65 or older can exclude up to $65,000 of their retirement income on their state of Georgia income tax return.
“In any of these age categories, the taxpayer and their spouse can qualify for the exemption. However, each must qualify individually. If both spouses qualify, they can each claim the amount indicated based on their ages.”
State or federal deductions are the same for retirees as other filers, Jarrett said, and the most common ones are itemized: mortgage interest, charitable donations and property taxes, along with local and state income taxes.
Seniors should also be aware of income thresholds for filing taxes. The minimum amount for retirees under age 65 is $12,550, and those older than 65 must file when they pass the $14,250 mark, Jarret said, adding that these amounts don’t include Social Security income.
Tax tips
Jarrett has some pointers that will help older filers add up income and determine what they can deduct and exclude.
Credit: Photo contributed by Kirk Jarrett
Credit: Photo contributed by Kirk Jarrett
- Know the makeup of your income in retirement, such as Social Security, employer-sponsored retirement and interest from savings are the big three.
- Plan before you retire. Have a plan of reducing personal debt along with a plan for your monthly income and expenses. We have a limited ability to create income to fund houses, cars, vacations, credit cards, etc. once we are on the “fixed income” retirement plan. It is difficult to manage and enjoy the change for retirement if we aren’t managing our finances before we get to this stage in life.
- Find good advisors to help with the impact of taxes, retirement income and other issues for retirement planning.
For 2021 income tax brackets, visit www.irs.gov.
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