See how retired workers are saving money this tax season with Tracfone.
Retirement should be a time to relax and enjoy life to the fullest. But every spring when tax time comes around, retired workers are faced with some unique challenges. They have to try to find the best ways to make the most of their deductions and credits. As you prepare to file now and in the future, these tips can help Tracfone customers save.
1. Donate to charity
Charitable donations are a great tax deduction. Not only will you get to contribute to a good cause in your community, but you’ll see better results come tax time, as well. You can usually deduct up to 50% of your adjusted gross income as charitable donations. Plus, if you’re driving on behalf of a charity, you can also deduct mileage expenses.
2. Reduce your spending
While thoughtful retirement planning should allow you to maintain the lifestyle you enjoyed while working full-time, retired individuals should look for ways to cut spending after leaving the workforce. Why? Because spending less will require you to draw less money from your retirement investments. In turn, this can keep your Adjusted Gross Income (AGI) lower, helping you avoid a higher tax bracket and higher taxes. This doesn't mean you should drastically change your lifestyle, but paying off credit cards, mortgage loans and other debt while looking for ways to trim expenses in general can be helpful.
3. Downsize to a smaller home
Now that your kids have left the roost and you’re looking for a home with less maintenance, consider selling your house. By downsizing, there’s a good chance you’ll turn a profit. In addition, you don’t have to pay any tax on this profit as long as you lived in the house for at least two of the five years prior to selling it.
