Keep an eye on your returns

Your post-retirement activities can affect your tax situation. Here's how.

Watch your bracket

If you wait until your full retirement age to start collecting from Social Security, you can earn income without losing any benefits. But if your income and perhaps a pension push you into a higher tax bracket, your overall tax burden could increase. Your financial adviser might be able to help you minimize the tax bite.

File the right forms

If you decide to run your own business, the taxes you'll pay and the additional forms you'll have to file depend on the business structure you choose. For example, if you operate as a sole proprietor, then file Schedule C with whatever versions of Form 1040 you use for your personal return. You'll have to contribute 15.3 percent of your net income, often on a quarterly basis, for Social Security and Medicare. Check out IRS Publication 535, available on the IRS Web site, for help figuring out which business deductions you can take. Also see IRS Publication 334, Tax Guide for Small Business.

Take some credit

If you go back to school, you might be able to claim the Hope or Lifetime Learning tax credit. You can claim a Hope credit of up to $1,650 for qualified education expenses during the first two years of post-secondary classes, or a $2,000 Lifetime Learning credit for post-secondary classes or for courses to improve job skills. Income limits apply; see IRS Publication 970 for more information.