Help pack a million meals for struggling seniors on 9-11. Volunteer today



Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

Happy African American couple

AARP Books

Visit the Books Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular


You May
Also Like

to READ.

Filing Tips for Older Taxpayers

Save money by avoiding common mistakes on your tax return

The economy and volatile nature of the stock market have created financial challenges for many older taxpayers. If you feel like there's been an assault on your retirement nest egg, you're not alone. Here are ways to save money at tax time and avoid common filing mistakes that can cost you.

Take a higher standard deduction

If you don't itemize deductions, the IRS gives you a standard deduction amount that reduces your taxable income. For single and married filers, the deduction amounts are $5,700 and $11,400, respectively. If you're 65 or older, don't forget to claim an additional deduction of $1,100 for joint filers ($1,400 if single). Joint filers in this situation can reduce their taxable income by another $2,200 — not a bad savings! Unfortunately, if you itemize your deductions, there's no corresponding additional deduction.

Use stock losses to offset other income

Many of us sold stock at a loss in 2010. While no one likes losses, at least you can use capital losses up to $3,000 to offset other ordinary income. Even though this maneuver won't make up for your losses, it will lower your tax liability and mitigate some of the pain. By the way, if your net losses exceed $3,000, you can carry the excess amount over to use in 2011.

Review pension, retirement distributions

Pay particular attention to your state tax rules for pension distributions. Many states exclude from taxation certain types of pensions or allow partial exclusions. For example, some states exclude up to $20,000 of retirement income and others may exclude civil service employees' pensions in full. The rules vary from state to state, so it's important to do a little research to ensure you're not reporting more income than is required.

Also, make sure you properly account for the taxable part of your distribution, which is reported on Form 1099-R. Box 1 of this form reports your gross distribution while box 2a reports the taxable amount. Don't overlook the fact that the taxable amount may be less than the gross distribution amount.

Be sure to fully value your donations

If you're giving back to the community through volunteer work and by donating household items, you may have deductions that in the past you overlooked. Mileage incurred to volunteer at a soup kitchen or other charitable event can be written off at 14 cents per mile. When you donate your used household items, such as furniture, clothing and appliances, you're doing your community a favor and scoring a tax deduction at the same time. Surprisingly though, most people undervalue their donations, which means their tax write-off is understated.

Don't forget taxes on Social Security

If you grew up thinking Social Security benefits were tax-free, think again. If you're earning other income, some of your benefits may be taxable. The only way to tell is to go through the time-consuming task of figuring this out on the Social Security benefits work sheet. And don't forget that Social Security benefits include monthly retirement, survivor and disability income. They don't include supplemental security income payments, which aren't taxable.

Bob Meighan is a certified public accountant and vice president of TurboTax. All the information presented on is for educational and resource purposes only. We suggest that you consult with your financial or tax adviser regarding your individual situation. Use of the information contained in this website is at the sole choice and risk of the reader.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.


The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Member Benefits HomeServe

Members can protect their homes with comprehensive repair plans from HomeServe.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Woman holding smartphone in city, Google map tool

Members can find discounts on the go via the AARP® Member Advantages Offer Finder app.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points


Advance your skills. Transform your career.

Explore your learning possibilities.