The federal government offers some major
tax breaks for older Americans. Some
of these perks deserve more publicity than they receive.
At age 65, the Internal Revenue Service
gives you a larger standard deduction.
For 2020, standard deductions look like this for taxpayers 65 and older: single
filer or married filing separately, $14,050; head of household, $20,300; married
filing jointly or qualifying widow(er), $26,100 (when one spouse is 65 or
older) or $27,400 (when both spouses are 65 or older). The standard deductions
for younger taxpayers range from $1,650-$2,600 less.1
There are two situations where your standard deduction may be limited
at age 65 or older, or disappear entirely. One is when another taxpayer claims
you as a dependent. The other is when you are married and filing separately,
and your spouse itemizes deductions.1
Continue reading “Tax Considerations for Retirees” →