Federal Income Tax Benefits

• Tax Credit for the Elderly
• Sale of Principal Place of Residence
• Taxpayer Penalty Review Program
• IRS Tax Counseling/Assistance

In general, the federal income tax laws apply to all taxpayers regardless of age. However, there are certain provisions, which give special treatment to older persons. At age 65, the standard deduction, if you do not itemize deductions, is increased for both single taxpayers and married taxpayers filing jointly. The Internal Revenue Service (IRS) also allows an addition to the standard deduction for blindness, regardless of age.

Tax Credit for the Elderly

Persons with low income, who are age 65 or over, or under 65 and retired on permanent and total disability, may be eligible for a Tax Credit for the Elderly. You are a qualified individual for this credit if you are a U. S. citizen or resident at the end of the tax year, and you are:

• Age 65 or older, or
• Under 65, retired on permanent and total disability, and
• Received taxable disability income, and
• Did not reach mandatory retirement age before the tax year

For further information, please consult IRS Publication 524, "Credit for the Elderly or Disabled." This publication may be obtained by calling the IRS Publications/Forms toll-free telephone 1-800-829-3676.

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Sale of Principal Place of Residence

Persons age 55 or older selling their principal place of residence may exclude from their gross income up to $250,000 for single filers or $500,000 for joint filers of the capital gain on a one-time basis, provided they owned and occupied the residence for two of the five years ending on the date of sale. IRS Form 2119 must be filed with the Internal Revenue Service the year in which the property is sold.

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Taxpayer Advocate Service

While the IRS is improving its systems and providing better service, some taxpayers still have difficulty obtaining solutions to a problem or an appropriate response to an inquiry. To make sure that all taxpayer problems receive equal consideration, the taxpayer advocate service provides someone to speak for them within the service-- an advocate. Taxpayers facing significant hardships due to an action or inaction on the part of the IRS, may now apply to the IRS for assistance. This service of the IRS may be requested through filling out IRS Form 911. For further information, call the IRS toll-free number, 1-877-777-4778 or visit website www.irs.gov.

IRS Tax Counseling/Assistance

Through the Tax Counseling for the Elderly (TCE) program, IRS-trained volunteers assist individuals age 60 and over with their tax returns at various neighborhood locations. In addition, certain volunteer income tax assistance aides (VITA) have been trained to help older persons with their tax returns. For further information regarding site locations, please contact your Area Agency on Aging. For more information on TCE call 1-800-829-1040. To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit www.aarp.org/money/taxaide/taxcounseling/.

For more information on TCE call 1-800-829-1040. To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit www.aarp.org/money.

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