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People in different stages of life can vary quite a bit in what tax issues are present for them. So, each age group can have its own set of tax mistakes it is particularly important to watch out for. Today’s post will be focused on tax mistakes for one particular group: people of retirement age.
Some examples of big tax mistakes that retirees could fall into are:
- Not keeping good and accurate records of their health care spending. This could cause problems when it comes to health-care-related deductions.
- Making tax-impacting mistakes with their retirement accounts, such as not paying attention to rules regarding minimum distributions.
- Misunderstanding what income of theirs could be taxed. This could include not understanding what taxing rules they are subject to when it comes to things like government benefits and retirement account withdrawals.
These sorts of tax mistakes could have many different impacts on a retiree. Some could lead to them not being able to claim as much in deductions as they could have. Some could cause them to face tax penalties. And some could lead to major disputes with the Internal Revenue Service.
When a retiree ends up in a legal battle with the IRS over a tax mistake, what happens in the matter could have huge financial implications for them. It could impact what sort of financial condition they will be in for the rest of their retirement. Experienced tax lawyers can help retirees who are facing such disputes get a full picture of their options.
Source: USA Today, “The 3 biggest tax mistakes retirees make,” Maurie Backman, Feb. 6, 2017