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)
If you are 65 or older, you may increase your standard deduction by $1,850 if you file Single or Head of Household. If you are Married Filing Jointly and you OR your spouse is 65 or older, you may increase your standard deduction by $1,500.
Additional Personal Credit for the Elderly and Blind.
Every California taxpayer is entitled to personal exemption or dependent credits for all the members of the household. An additional credit can be claimed for any person in a household who is (a) age 65 or older on the last day of the tax year; or (b) blind.
The 2023 standard deduction is $13,850 for single filers and those married filing separately, $27,700 for those married filing jointly, and $20,800 for heads of household. It is claimed on tax returns that were due April 15, 2024.
Additional Standard Deductions for Age and Blindness
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.
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.
The amount of the Child and Dependent Care Credit depends on the amount paid to the care provider and the adjusted gross income of the taxpayer. The maximum credit amount as of tax year 2023 is $3,000 for one qualifying individual, or $6,000 for two or more qualifying individuals.
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. If you're married filing jointly and only one of you is 65 or older, that amount is $29,200.
After an inflation adjustment, the 2023 standard deduction increases to $13,850 for single filers and married couples filing separately and to $20,800 for single heads of household, who are generally unmarried with one or more dependents.
You report the taxable portion of your social security benefits on line 6b of Form 1040 or Form 1040-SR. Your benefits may be taxable if the total of (1) one-half of your benefits, plus (2) all of your other income, including tax-exempt interest, is greater than the base amount for your filing status.
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?
How much is the standard deduction for 2023? Note: If you are at least 65 years old or blind, you can claim an additional 2023 standard deduction of $1,850 (also $1,850 if using the single or head of household filing status). If you're both 65 and blind, the additional deduction amount is doubled.
Certain taxpayers aren't entitled to the standard deduction: You are a married individual filing as married filing separately whose spouse itemizes deductions. You are an individual who was a nonresident alien or dual status alien during the year (see below for certain exceptions)
The standard deduction: Allows you to take a tax deduction even if you have no expenses that qualify for claiming itemized deductions. Eliminates the need for itemizing deductions. Allows you to avoid keeping records and receipts of your expenses in case of a tax audit.
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 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.
Introduction: My name is Lakeisha Bayer VM, I am a brainy, kind, enchanting, healthy, lovely, clean, witty person who loves writing and wants to share my knowledge and understanding with you.
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