End of year tax tips for seniors

The year 2011 is coming to a close, and that means this is the perfect time of year for retirement living seniors to think about how they can minimize their tax bill for the year. According to a recent article in USA Today, there are a few ways seniors can save extra money before tax season arrives.

Larry Karmel, a tax specialist with Metis Group, told the newspaper that seniors should consider delaying extra income for the beginning of January, instead of in December. This discretionary income includes interest and dividends from investment, or wages or salaries, for example.

Experts also suggest seniors should delay taking social security payments until at least the age of 70 and-a-half, so they can minimize tax payments. Another route some seniors take is to move to states which have low income tax rates, such as Nevada or Florida. But even these states are no longer sure bets.

“With the economic downturn, many states are enacting or thinking about new and higher taxes on residents,” tax expert Gary Duboff told the media outlet. “It's a common approach for many retirees to move, but unexpected changes in tax law could have an impact on planning.”

Financial situations can change, but many experts say the best options are taking stock of one’s finances, saving as much as possible, and having a plan for the future.