Although Tel-Law information is periodically reviewed, it is important for you to realize that changes may occur in this area of law. This information is not intended to be legal advice regarding your particular problem, and it is not intended to replace the work of an attorney.

If you do not have an attorney, the Oregon State Bar Lawyer Referral Service can help you. Online Lawyer Referral Service information and a fill-in form is available. Or you may contact the service by phone: The number to call from the Portland area is 503-684-3763 or toll-free from anywhere else in Oregon, 1-800-452-7636.

The following information regarding tax benefits is brought to you as a public service by the lawyers of the State of Oregon. The material presented is general legal information intended to alert you to possible legal problems and solutions.

The Federal Income Tax laws apply equally to all taxpayers, with the exception of certain provisions for taxpayers who are age 65 or older. Some preferential treatment is given to all taxpayers in this age group, and additional benefits are available only to those who qualify because of individual circumstances.

All taxpayers 65 or older have benefits that fall under two general categories: first, a special gross income requirement and second, an increased standard deduction for age.

Gross income is generally defined as all the income you receive, in the form of money, property and services, that is not expressly exempt from tax by law. If you are age 65 or older and had a gross income of a specified amount for the tax year, you must file a federal income tax return even if you owe no tax. This required amount of gross income differs, according to whether you are single or married, or whether you and your spouse are age 65 or older. Your local Internal Revenue Service office can give you the amount of gross income required for filing a tax form.

There are other circumstances under which you must file a federal income tax return if you are 65 or older: if you are self-employed and had a particular amount in net earnings, had income from tips from which no Social Security tax was collected, and are the survivor, executor, administrator or legal representative of a person who died during the year. Details of the procedure for filing under these circumstances need to be obtained from your local I.R.S. office.

The second category of special benefits deals with an increased standard deduction for age. If you are age 65 or older on the last day of the tax year, you are allowed a higher dollar amount for a standard deduction.

An increased standard deduction for blindness is allowed to any taxpayer who is blind during the tax year, or blinded up to and including the last day of the tax year. Blindness, for the purpose of this exemption, is given a legal definition, which can be obtained from your local I.R.S. office. If your vision is no greater than that which is legally defined, then attach a statement from a qualified physician or registered optometrist to your tax return. A person who is totally blind needs only a statement to that effect attached to his or her return.

While the tax benefits already mentioned apply to all taxpayers in this age group, you may be interested in other benefits given for individual circumstances. There are two basic types of benefits for individual circumstances, and require you to file Form 1040.

The first of these deals with the sale of your residence. In 1997, Congress changed the treatment of the sale of your residence. No longer do you have to be 55 years of age or older to qualify. Under this new law, you may exclude gain from the sale of your residence in an amount not exceeding $250,000. If you are married and file a join return, you can exclude $500,000 of gain from the sale of your residence. You must have used the home as your principal residence two out of the previous five years. You qualify for this exclusion every two years. Your local IRS office will be able to give you more details on these new residential sale exclusions.

Another benefit that may be available is a credit for the elderly which allows you to pay less tax. The allowable credit varies with your filing status and income and is reduced by nontaxable income such as pension, annuity or disability benefits received under Social Security, railroad retirement or veterans Administration programs. If you are married, generally you must file a joint return, and the credit is also based on your spouse's age and income. If you were a non-resident alien at any time during the tax year, you may be able to take the credit, but only if you are married to a U.S. citizen or resident alien, and you and your spouse elect to file a joint return.

Schedule R is used to figure the tax credit for the elderly. If you wish, the IRS will compute the credit for you.

Taxpayers 65 or older should refer to an I.R.S. publication, #554 entitled "Tax Benefits For Older Americans." This publication is available free by writing or calling your local Internal Revenue Service Office. Information about your State tax can be obtained at your Oregon Department of Revenue office.

This information is from the Oregon State Bar's Tel-law service, a collection of recorded legal information messages prepared by the lawyers of Oregon. In addition to being online, the Tel-law service is accessible by telephone at 503-620-3000 or toll-free in Oregon only, 1-800-452-4776. A touch tone phone allows direct access 24 hours a day, 7 days a week. To receive a free Tel-law brochure listing the subjects available call 503-620-0222, ext. 0.