Massachusetts Seniors: Tax Tips to Know Now

As one of the 41 states that require residents to file State personal income tax returns, Massachusetts expects to see your return by April 17th this year. Massachusetts can be a great state for taxpayers, offering minimum income limits under which taxpayers do not have to pay state income tax. There are also income limits that allow a reduced income tax level. Seniors should explore all deductions and exemptions to make sure filing is necessary; if it is, be sure to keep as much of your money in your pocket as possible. Here are some ways you can do that.

Joint filers making less than $27,000 annually can qualify for either the limited return or file no return at all. For singles, the limits are $14,000 for limited income tax and $8,000 for no income tax. Head of Households making less than $24,000 can file a limited return. These limits can help seniors and others on a tight budget avoid being hit hard at tax time. Read the other tips in this article to find ways you can reduce your taxable income-possibly under the levels listed above.

The first bit of good news for seniors in this state: seniors over 65 should also look into the residential tax credit Massachusetts offers. Both homeowners and renters qualify for this credit as long as their primary residence is in the state. For many, this credit takes almost $900 off their taxable income! This is a great standard deduction for all Massachusetts residents.

Medical Savings Accounts (MSA's) and Health Savings Accounts (HAS's) both offer deductions from your state income tax in Massachusetts. Some of these deductions can reach as high as $5,000; people 55 years and older enjoy more benefits, up to $6,000 in some cases. Be sure to check for the correct amount for your plan and family circumstance at https://wfb.dor.state.ma.us. IRA deductions for those over 70 are exempt from being included as taxable income. Take this amount off before deciding if you must file state income tax or not.
Did you make energy-efficient improvements to your home before March 2006? Many of your purchases can be taken as deductions off your taxes. If you purchased new insulation for your home or windows, bought more fuel efficient furnaces or heating systems, or made other repairs to better insulate and heat your home, look into these special tax deductions on your purchases. Not only is your house is warmer, but now so is your heart, and your wallet can be fatter!
Finally, look into the many other exemptions available to Massachusetts taxpayers. For example, if you've been paying into the company 401(K) or other retirement plan, good for you. Massachusetts thinks this is a great idea and they would like to thank you by offering you the chance to take those contributions off your taxable income. This may apply to your spouse, as well. Don't forget about the personal deductions which range from $3500 for singles to more than $7000 for Head of Households. These are available to every taxpayer.

Hate paperwork and always out of stamps? E-file with TeleFile, the Massachusetts online filing program. Start the process at http://www.mass.gov/?pageID=dorterminal&L=4&L0=Home&L1=Individuals+and+Families&L2=Personal+Income+Tax&L3=Filing+Options&sid=Ador&b=terminalcontent&f=dor_options_telefile&csid=Ador. This is a free, convenient way to file your taxes and process your return quickly.

There are many options for Massachusetts seniors to save money on their personal income taxes this year. Through taking deductions that reduce your taxes owed and by using the many exemptions that can lower your taxable income, you can enjoy a stress-free tax season in 2007. You might even enjoy a hefty return! To find the answers to any other tax questions you may have, call the Massachusetts Department of Revenue at 1-800-392-6089 or visit https://wfb.dor.state.ma.us/webfile/wsi/Index.aspx.