The new Tax Bill that President Trump signed into law on December 22, 2017 will have impacts on all of us. While there were many concerns about how the bill would affect Seniors, these three changes will have particular effects on the senior population.
An Increase in the Standard Deduction and Preservation of Additional Senior Deduction: In the final bill, the standard deduction for taxpayers doubles to $12,000 for single filers and $24,000 for joint filers who are married. In addition, the additional standard deduction of $1,300 for filers over 65 remains in place, meaning married filers over 65 can take advantage of this additional deduction for $2,600.
Medical Expense Deductions: Anyone with high medical expenses exceeding 10% of their income can deduct a portion of those expenses. The new tax bill increases the deductible amount to over 7.5% of income for 2017 and 2018, which may be an additional benefit to Seniors. For many Seniors opting for continuing care or life plan communities like Kendal-Crosslands Communities, a portion of the entry fees – and additional portions of monthly fees can be deducted as well, providing significant tax savings for many.
Kendal-Crosslands Communities residents are able to benefit from a medical expense deduction on a portion of the entry fee in their entry year, and then, in addition, a portion of the monthly fee in the year it was paid. We have specific information on the amount of the deduction for the entry fee and monthly available each tax year, so please give us a call at 610-388-1441 if you’d like more information.
Caps on State and Local Tax Deductions: The new law caps state and local tax deductions to $10,000. For Seniors living in areas like Chester County, PA, the local taxes can often exceed this amount. By moving into a life plan community like Kendal-Crosslands Communities, Seniors can take advantage of all the benefits of the local community, but no longer have the same local tax obligations, which could be a significant yearly savings for many.
While there may be additional effects of the tax bill and the choices people make when approaching retirement, the good news is that at least for now, many Seniors will still be able to take advantage of the many tax benefits, and well as lifestyle benefits, offered by life plan communities like Kendal-Crosslands Communities.