Tax Help: Tips For Seniors
Dear Savvy Senior,

Can you give me the 2006 limits where seniors don't have to file a federal tax return? I manage a senior citizens' center and many of our retirees live on very limited incomes and may not need to bother. Also, can you tell me if Social Security benefits are taxable? I start receiving benefits in a few years myself and have heard several conflicting things. Tax Aiding Tonya

Dear Tonya:

Depending on your income level, your Social Security benefits may be taxable. To figure this out, add up all of your taxable income, plus any taxexempt interest you earned, plus half of your Social Security. If these combined amounts are under the required limits ($25,000 if you file as a single, and $32,000 if you file a joint return), then you owe no tax on your Social Security. If the total is greater, you will. For more information, call the IRS (800-829-3676) and ask for their free publication 554, "Older Americans' Tax Guide".

Federal Filing Requirements

Many older Americans don't have to file income tax returns because their gross income is under the filing requirements. Gross income includes all the income they receive that is not exempt from tax, not including Social Security benefits, unless they are married and filing separately. Here are the 2006 requirements that will help them determine whether or not they need to file a federal tax return:

+ Filing as a single: If their 2006 gross income was less than $8,450 ($9,700 if age 65 or older), they don't have to file.

+ Filing married or jointly: They don't need to file if their gross income was less than $16,900. Add $1,000 for each spouse age 65 or over.

+ Filing as head of household: If their gross income was less than $10,850 ($12,100 if age 65 or older), they don't have to file.

+ Married, filing separately: At any age, they must file if their income was at least $3,300.

+ Filing as a qualifying widow (er) with a dependent child: If their gross income was less than $13,600 ($14,600 if age 65 or older), they don't need to file.

Savvy Notes: The IRS has rules and exceptions for almost every circumstance, so be sure you check with a tax preparer to be sure you're doing what you're required to do. Also, for state income tax requirements, check with your state tax agency. For links to state and local tax agencies, see www.taxsites.com/state.html.

Tax Preparation Help

+ A great resource to help older taxpayers is the AARP Tax-Aide program. Sponsored by the IRS and AARP, Tax-Aide is a free, confidential tax preparation and counseling service available to all taxpayers, middle- and low-income, with special attention to those 60 years and older. You don't have to be an AARP member to get help.

From February 1 through April 15, trained and certified Tax-Aide volunteers set up sites in some 7,400 convenient locations around the country, such as malls, libraries and senior centers. They will also visit taxpayers in their homes if the taxpayers are physically unable to visit a site. To locate the nearest Tax-Aide site, call 888-227- 7669 or visit www.aarp.org/taxaide.

+ The IRS also offers the Volunteer Income Tax Assistance (VITA) program, which provides free tax preparation help to low- and moderate-income people- incomes generally below $39,000. To locate the nearest VITA site, call 800-829-1040.

Free File

The IRS also offers a service called Free File, which is a free online tax preparation and electronic filing service provided by commercial companies for taxpayers with an Adjusted Gross Income of $50,000 or less. To learn more, visit www.irs.gov.

Savvy Tips: To get help with your tax questions, call the IRS help line at 800-829-1040 or visit www.irs.gov. To order free federal tax forms and publications, call 800-829-3676. For extra help with unresolved tax issues, contact the Taxpayer Advocate Service at 877-777-4778 or visit www.irs.gov/advocate.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.savvysenior. org. Jim Miller is a contributor to the "NBC Today Show" and author of The Savvy Senior books.