Yes, seniors get several tax breaks in 2023. The IRS offers a number of deductions and credits that can help seniors reduce their tax liability.
Increased Standard Deduction
The standard deduction is a specific amount of income that you can deduct from your taxable income before you calculate your taxes. The standard deduction for seniors is higher than the standard deduction for younger taxpayers.
- For seniors who are single or married filing separately, the standard deduction is $14,700 in 2023.
- For seniors who are married filing jointly, the standard deduction is $27,700 in 2023.
- For seniors who are widowed and meet certain requirements, the standard deduction is also $27,700 in 2023.
Different Filing Threshold
The filing threshold is the income level at which you are required to file a tax return. The filing threshold for seniors is higher than the filing threshold for younger taxpayers.
- For seniors who are single, the filing threshold is $14,050 in 2023.
- For seniors who are married filing jointly, the filing threshold is $27,400 in 2023.
Social Security Tax Exemption
Social Security benefits are not subject to federal income tax for most seniors. However, if you have other income, such as wages, pensions, or investments, you may have to pay taxes on a portion of your Social Security benefits.
Business and Hobby Deduction
If you are self-employed or have a hobby that generates income, you may be able to deduct certain expenses from your taxable income. These expenses can include:
- Advertising expenses
- Supplies
- Home office expenses
- Expenses paid to a consultant or employee
- Business education expenses
Medical Expense Deduction
You may be able to deduct certain medical expenses from your taxable income if they exceed 7.5% of your adjusted gross income. These expenses can include:
- Doctor and dentist fees
- Prescription drug costs
- Mental health expenses
- Glasses, dentures, and orthodontic appliances
- Expenses incurred because of medical needs, such as parking fees paid at the doctor’s office
- Health insurance premiums
- The costs of senior care, such as in-home help or adult day services
Elderly or Disabled Tax Credit
The elderly or disabled tax credit is a tax credit that can reduce your tax liability. To be eligible for this credit, you must be over the age of 65 or permanently disabled. Your income must also meet certain requirements.
Charitable Deductions
You can deduct charitable donations from your taxable income. However, the amount of your deduction is limited to 60% of your adjusted gross income.
Retirement Plan Contribution Benefits
If you are still working and contributing to a retirement plan, you may be able to deduct a portion of your contributions from your taxable income.
Estate and Gift Tax
The estate and gift tax is a tax on the transfer of property from one person to another. The estate tax is imposed on the estate of a deceased person, while the gift tax is imposed on gifts made during a person’s lifetime. The estate and gift tax exemption is $12.9 million in 2023.
State Senior Tax Exemptions
Many states offer tax breaks to seniors. These tax breaks can include:
- Exemptions for Social Security benefits
- Exemptions for retirement income
- Reduced property taxes
Additional Resources
Note: This is just a general overview of tax breaks for seniors. The specific tax breaks that you are eligible for will depend on your individual circumstances. You should consult with a tax professional to determine which tax breaks you are eligible for and how to claim them on your tax return.
IRS raises income threshold and standard deduction for all tax brackets
FAQ
Do seniors still get an extra tax deduction?
What is the IRS deduction for seniors over 65?
At what age do seniors stop paying federal taxes?
Are there any federal tax breaks for retirees?
Do older people get tax breaks?
The U.S. tax code offers quite a few tax breaks exclusively to older adults, including a special tax credit just for those 65 or older. If you’re age 65 or older, you get a larger standard deduction, which might make it hard to choose between an itemized deduction and a standard deduction.
What tax breaks are available to older adults?
One of the most significant tax breaks available to older adults is the tax credit for the elderly and disabled. This tax credit can wipe out some, if not all, of your tax liability if you end up owing the IRS. You must be age 65 or older as of the last day of the tax year to qualify.
What is the standard deduction for seniors in 2021?
The standard deduction for single seniors in 2021 is $1,700 higher than the deduction for taxpayer younger than 65 who file as single or head of household. If you are Married Filing Jointly and you or your spouse is 65 or older, your standard deduction increases by $1,350 each.
Are there tax breaks for retirees over 65?
Learning about common but often overlooked tax breaks for retirees over age 65 can help. When you turn 65, the IRS offers you a tax benefit in the form of an extra standard deduction for people age 65 and older. For example, a single 64-year-old taxpayer can claim a standard deduction of $13,850 on their 2023 tax return.