Senior discounts are commonplace in restaurants, but there's one for taxes too. It's called the extra standard deduction, exclusively for people who are 65 years and older by the end of the tax year.
Everyone knows about the standard deduction, which is a flat dollar amount determined by the IRS that lowers your taxable income without having to itemize deductions like mortgage interest and charitable donations. That one is available to everyone, but older adults get an additional one on top of the standard deduction.
A larger overall deduction for older adults further reduces their taxable income, and that means a smaller tax bill and more money in your pocket.
Taxpayers who are 65 years or older.Theamount of the additional standard deductionvaries depending on filing status; whether you or your spouse is at least 65 years old;and whether you or your spouse is blind.
For tax year 2023, you're considered 65 if you were born before Jan. 2, 1959, the IRS said. If you or your spouse were also legally blind by year's end or have a doctor's note explaining why you should be considered blind, you can claim an even larger additional deduction. You also can’t be claimed as a dependent or itemize your taxes, among other things.
People who are blind and under 65 receive the additional standard deduction, not the larger one.
How much is the additional standard deduction?
For tax year 2023, the additional standard deduction amounts for taxpayers who are 65 and older or blind are:
$1,850 for single or head of household
$1,500 for married taxpayers (per qualifying person) or qualifying surviving spouse(a married couple of two 65+ adults would take a total deduction of $27,700 (standard deduction) + $1,500 for one 65+ adult + $1,500 for second 65+ adult = $30,700)
If you are 65 or older and blind, the extra standard deduction is:
$3,700 if you are single or filing as head of household
$3,000 per qualifying individual if you are married, filing jointly or separately
The above amounts are in addition to the regular standard deductions of:
$13,850 if single or married filing separately
$20,800 ifhead of household
$27,700 ifmarried filing jointly or qualifying surviving spouse
Should I itemize or take the standard deduction?
Nearly 90% of Americans take the standard deduction, IRS data from tax year 2020 show.
However, whether you should itemize or not depends on whether the total of your itemized deductionstops your standard deduction or whether you must itemize deductions because you can't use the standard deduction, the IRS says.
Hints to whether you may benefit from itemizing, without doingdetailed calculations, could lie in whether youhad a major life event like buying or selling a home; incurred significant medical expenses; or made sizable donations.
However, if you are 65 or older and file as a single taxpayer, you get an extra $1,850 deduction for tax year 2023. Married and filing jointly or separately? The extra standard deduction is $1,500 for each person who is qualified. For taxpayers who are both 65-plus and blind, the extra deduction is $3,700.
For 2023, the additional standard deduction amounts for taxpayers who are 65 and older or blind are: $1,850 for Single or Head of Household (increase of $100)$1,500 for married taxpayers or Qualifying Surviving Spouse (increase of $100)
Additional standard deduction – You're allowed an additional deduction if you're age 65 or older at the end of the tax year. You're considered to be 65 on the day before your 65th birthday (for tax year 2023, you're considered to be 65 if you were born before January 2, 1959).
The 2023 standard deduction was $13,850 for single filers and those married filing separately, $27,700 for those married filing jointly, and $20,800 for heads of household. These amounts apply to tax returns that were due April 15, 2024.
You might still qualify for the deduction if the person you're supporting doesn't qualify as your dependent because he or she failed the gross income test (i.e., had gross income of $4,700 or more in 2023, or $5,050 or more in 2024). The deduction is worth up to $2,500 per year.
Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.
A portion of the Child Tax Credit is refundable for 2023. This portion is called the Additional Child Tax Credit (ACTC). For 2023, up to $1,600 per child may be refundable.
The IRS considers an individual to be 65 on the day before their 65th birthday. The standard deduction for those over age 65 in tax year 2023 (filing in 2024) is $15,700 for singles, $29,200 for married filing jointly if only one partner is over 65 (or $30,700 if both are) and $22,650 for head of household.
Taxes aren't determined by age, so you will never age out of paying taxes. Basically, if you're 65 or older, you have to file a return for tax year 2023 (which is due in 2024) if your gross income is $15,700 or higher. If you're married filing jointly and both 65 or older, that amount is $30,700.
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older. Married retirees filing separately who earn less than ...
The standard deduction for 2023 is: $13,850 for single or married filing separately. $27,700 for married couples filing jointly or qualifying surviving spouse. $20,800 for head of household.
Single filers with a combined income of $25,000 to $34,000 must pay income taxes on up to 50% of their Social Security benefits. If your combined income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits. Do you need help figuring out your required minimum distributions?
The standard deduction is a specific dollar amount that reduces the amount of taxable income. The standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and/or blindness. In general, the IRS adjusts the standard deduction each year for inflation.
Taxpayers who are age 65 or older can claim an additional standard deduction, which is added to the regular standard deduction. For the 2024 tax year (for forms you file in 2025), the extra amount ranges from $1,550 to $3,900, depending on your tax filing status and whether you are blind.
This credit can be claimed for: Dependents of any age, including those who are age 18 or older. Dependents who have Social Security numbers or Individual Taxpayer Identification numbers. Dependent parents or other qualifying relatives supported by the taxpayer.
For 2023, the maximum limit on earnings for withholding of Social Security (old-age, survivors, and disability insurance) tax is $160,200.00. The Social Security tax rate remains at 6.2 percent.
The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2022. There is no wage base limit for Medicare tax. Social security and Medicare taxes apply to the wages of household workers you pay $2,600 or more in cash wages in 2023.
Health insurance premiums can be tax deductible when you retire, but it depends on several factors such as your age, the type of health insurance plan that you have and whether you are self-employed or not.
Introduction: My name is Lidia Grady, I am a thankful, fine, glamorous, lucky, lively, pleasant, shiny person who loves writing and wants to share my knowledge and understanding with you.
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