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When you think of tax breaks for seniors, Social Security and retirement accounts probably come to mind first.
But beyond the basics, there are some lesser-known tax rules that can help older adults reduce their tax bill. So if you’re retired or nearing retirement, here are some tax breaks worth keeping on your radar.
Higher standard deduction for senior citizens
Seniors age 65 and older can now deduct an additional $6,000 in addition to their standard or itemized deductions, based on changes in the One Big Beautiful bill. And since many seniors no longer itemize deductions, this increase is one of the easiest ways to reduce your tax bill without doing anything extra.
Loans for the elderly or disabled
To qualify for the tax credit for the elderly or disabled, you must be at least 65 years old or disabled by the end of the tax year, which means you meet specific criteria such as being permanently and totally disabled before retirement. Depending on your situation, the credit can be worth anywhere from $3,750 to $7,500 before income limits apply.
If you qualify, you must complete Schedule R. Part one starts with questions about your age and disability status. If you have a disability, you will verify your medical condition in Part Two.
Tax-free Social Security benefits – in some cases
Many people don’t realize that Social Security income is not always taxable.
Whether your benefits are taxed depends on your combined income, which includes your adjusted gross income, nontaxable interest and half of your Social Security benefits.
From there, the IRS uses income thresholds to determine how much, if any, of your benefits is taxable. For example, if you’re a single filer with a combined income of less than $25,000 (or $32,000 for married couples filing jointly), your Social Security benefits generally won’t be taxed at all. As your income rises above those levels, up to 50% or even 85% of your Social Security benefits may be taxable.
medicare premium tax cut
If you become self-employed after retiring, you can deduct premiums paid for Medicare Part B and Part D, as well as the cost of Medigap policies or Medicare Advantage plans.
You can deduct these expenses whether you itemize them or not. That said, you can’t claim this deduction if you’re eligible to be covered under an employer-subsidized health plan offered by your employer or your spouse’s employer.
