TALLAHASSEE – With tax filing season in full swing statewide, millions of Floridians are grappling with recent changes to tax law enacted by Congress and signed into law by the President earlier this year. But many who are helping to care for older loved ones may not know of tax changes that could save them hundreds of dollars or more, according to a leading AARP Florida volunteer.
“First, taxpayers should know that a $500 tax credit is available for dependents over the age of 17 living with the taxpayer. Also, simply by choosing to file their taxes as heads of households, hundreds of thousands of family caregivers, who are single or living separately from their spouses, could save hundreds of dollars each on their income taxes when they file this year,” said Fred Bates, who serves as the top AARP Foundation Tax-Aide volunteer in Florida and Georgia. Also a member of the AARP Florida all-volunteer Executive Council, Bates is a graduate attorney and former business consultant from Sanford.
To qualify as “head of household” for income-tax purposes, taxpayers need to be considered unmarried for the tax year or separated from their spouse for the last 6 months of the tax year, and must have provided at least half the cost of the home of a qualified person claimed as your dependent for taxpayers, Bates noted.
Bates cited his analysis of the tax law’s provisions on filing status, which provides in 2017 a $9,350 standard deduction for qualified unmarried taxpayers who file as “head of household.” If taxpayers file as single, the former law provides a lower deduction of $6,350 for 2017. In addition to the higher standard deductions, the head of household filing status also offers lower marginal tax rates.
For example, a single taxpayer (or one who has been living alone for at least six months) with an adjusted gross income of $50,000 a year could claim a $6,500 standard deduction on their 2017 taxes if filing as a single taxpayer. If the taxpayer were able to qualify for head of household filing status, the taxpayer could claim a $9,350 standard deduction. Coupled with higher exemptions also allowed under head of household filing status, the taxpayer could pay $1,319 less in federal income taxes.
Bates also noted that in 2018, standard deductions will rise. Qualified unmarried taxpayers who file as “head of household” will qualify for an $18,000 standard deduction in 2018 and taxpayers filing as single will qualify for a $12,000 tax deduction.
According to AARP research, there are more than 2.67 million family caregivers in Florida, hundreds of thousands of whom are adult children who are helping to provide for a frail parent or another older loved one.
Bates noted that married taxpayers usually will file jointly and will not use the Head of Household filing status, as the married-filing-jointly tax status offers even higher standard deductions. Taxpayers with unusually high amounts of itemizable deductions might also wish to review whether they are better off claiming a standard deduction or itemizing deductions.
“It always pays to understand tax law before you file your return,” Bates said. He urged taxpayers to consider going to one of hundreds of AARP Foundation Tax-Aide sites to get free assistance with tax filing. About 3,200 volunteers in Florida worked at 286 sites in 2017, offering free assistance to 223,000 taxpayers. Florida taxpayers received about $49 million in earned income-tax credits on returns that Tax-Aide volunteers helped prepare. Tax-Aide volunteers are trained and certified annually by the IRS.
To find a Tax Aide site near you, go to www.aarp.org/taxhelp or call 1-888-687-2277.