Many tax deductions are available to seniors from the IRS (Internal Revenue Service), but not everyone is aware of them. People who are aware of the 2023 standard deduction for seniors are already halfway through. For both federal and state taxes, there are additional deductions and things to take into account.
Here we list down the top 3 tax deductions for seniors-
Increased standard deduction
The standard deduction increases for those over 65. The amount varies annually according to their filing status. The standard deduction for seniors under the 2023 IRS tax code is $13,850 for those who are single or married and filing separately, $27,700 for those who are qualified widows or who are married and filing jointly, and $20,800 for a head of household.
Deduction for medical expenses
Additionally, seniors have the option to deduct medical expenses from their taxes. It is possible to itemize their deductions and write off certain medical expenses, which may result in tax advantages, especially for senior citizens who have high healthcare expenses. Medical costs that exceed 7.5% of their adjusted gross income are deductible. While general health-related expenses like vitamins or gym memberships cannot be written off, professional medical expenses like payments to doctors or dentists generally are.
Exemption from social security tax
Federal income taxes are frequently not applied to social security earnings. Seniors cannot be subject to federal income taxes if they file as an individual and their annual combined income, including social security and other earnings, is less than $25,000. Social security benefits are only subject to income tax on half of their total income, which is between $25,000 and $34,000.
The $32,000 barrier for paying any taxes on Social Security benefits applies to married couples filing jointly. Seniors are required to pay taxes on 50% of their Social Security benefits if their total household income as a couple is between $32,000 and $44,000. For individuals or couples who earn more than the 50% threshold, 85% of their benefits are taxed.
There are many other tax deductions for seniors including- Business and hobby deduction, elderly or disabled tax credit, charitable deductions, retirement plan contribution benefits, estate and gift tax, state senior tax exemptions etc.