1. See if you qualify for tax credits under programs for certain elderly or disabled taxpayers.
2. Check the tax treatment of Social Security benefits.
3. If your child, or a friend under some conditions, provides at least half of your financial support, he or she may be able to get a tax benefit by claiming you as a dependent on their tax return. Your income cannot exceed $3,700 to qualify for this deduction.
4. Check any 1099-R forms you receive for income from your various retirement accounts and make sure you take advantage of any income that is not taxable on your return.
5. If you can afford to, avoid early distributions from your retirement plan. They can hit you with higher taxes, although there are hardship exemptions for such withdrawals.
6. If you’re 70½, make sure you don’t forget to take your required minimum distributions (RMDs) from any tax-deferred retirement plans. Failure to take RMDs can trigger a 50 percent tax on the amounts that should have been withdrawn.
7. Don’t forget that extra $1,000 contribution that taxpayers may make to their IRAs on top of the normal annual maximum of $5,000. For the 2011 tax year, IRA contributions may be made until April 17, 2012.
Year-End Tax Planning Tips for Seniors