What is a tax deduction?
A tax deduction is a dollar amount that taxpayers can deduct from their taxable income to minimize the total amount of taxes they owe to the IRS.
Generally, taxpayers pay a percentage of their overall income in the form of taxes. Deductions reduce that overall income, thereby lowering the percentage and total amount in taxes they might owe.
As a senior citizen or retiree, you might be eligible for several tax deductions. These tax deductions for seniors can help you protect your income in retirement.
What tax deductions are available for seniors?
Eligibility for each of the tax breaks for seniors depends on several factors.
Let’s take a look at each of the tax deductions for senior citizens for which you may be eligible:
Additional standard deduction
Seniors may be able to claim the additional standard deduction for people over 65. This deduction stacks on the regular standard deduction, and can further reduce your taxable income.
If you were born before January 2, 1960, you are considered to be over 65 for tax year 2024 (paid in 2025). This tax break for seniors varies depending on several factors.
Here’s a breakdown of the available additional standard deduction tax breaks for seniors, along with the conditions attached to each:
- Single or head of household: $1,950
- Married (filing separately) or widowed: $1,550 per qualifying person or qualifying surviving spouse
- Single or head of household and blind: A basic standard deduction and an additional standard deduction equal to the sum of the additional amounts for both age and blindness.
The regular standard deductions for tax year 2025 are:
- Single or married filing separately: $15,000
- Head of household: $22,500
- Married filing jointly or widowed (qualifying surviving spouse): $30,000
Spousal IRA contributions
Typically, once you retire and are no longer drawing an income, you generally can’t make contributions to your individual retirement account (IRA).
Depending on the specific type of IRA you might have, those contributions may be tax-deductible, meaning that they can reduce your taxable income.
So, if you’re no longer making those contributions, you may miss out on the deductions.
But spousal IRA contributions may make a difference for some couples. Spousal IRA contributions for retirees allow a working spouse to contribute to an IRA or Roth IRA on the retired spouse’s behalf.
Note the following conditions attached to this tax deduction for retirees:
- The contributing spouse’s income must meet the minimum IRA requirement (sufficient for their contributions to both their own IRA and yours).
- The annual limit for such contributions was $7,000 for 2024 and 2025.
- For the 2024 tax year, total combined contributions to your and your spouse’s IRAs cannot exceed $14,000, or $15,000 if only one of you is at least 50 years old. Said contributions cannot exceed $16,000 if both of you are older than 50.
Tax deduction for Medicare premiums
If you are on Medicare, but paying additional premiums to get the level of healthcare coverage you need, those premiums may be tax-deductible. Specifically, Medicare premiums are tax-deductible as a medical expense on an itemized federal tax return.
For 2024, you can deduct medical expenses only if you itemize deductions and only to the extent that total qualifying expenses exceed 7.5% of adjusted gross income. Alternatively, if you become self-employed after retirement, your premiums for Medicare Parts B and D are tax-deductible.
This tax deduction for retirees extends to the cost of supplementing your Medicare with Medigap or a similar policy, or of taking out a Medicare Advantage plan.
Tax credits
You may also qualify for a tax credit for low-income older adults, called the Credit for the Elderly or the Disabled. The tax credit ranges between $3,750 and $7,500.
You may be eligible if you meet the following criteria:
- You were age 65 or older at the end of the tax year, or you were under 65 but retired on permanent and total disability and received taxable disability income.
- You pass two different income tests related to your adjusted gross income (AGI) and the combined total of your Social Security, pension, disability, and annuity income. (Maximum income thresholds differ depending on your filing status).
- You’re a qualified individual.
Required minimum distributions
If you are retired and have a traditional IRA, you have the option to hold back a large portion of your required minimum distributions (RMDs) until the end of the year (December).
If you don’t need the entire RMD to live on during the year, this tax break for retirees allows you to cover your estimated tax on the RMD and your other taxable income.
How do retirees get tax deductions?
To learn how to maximize tax deductions for senior citizens, visit the IRS website’s Tax Information for Seniors & Retirees page. Here, you’ll find guidelines and links to the relevant forms.
Don’t be alarmed if you find the volume of information available on this page overwhelming. An expert financial advisor may be able to help you navigate the process.
Get expert financial advice
To make your retirement as comfortable as possible, you should know about all the available tax deductions and credits for senior citizens. You also need to know how these apply to you and how to take advantage of these tax breaks for seniors.
To learn more about planning your retirement and for expert financial advice, let Unbiased match you with a financial advisor who understands how important your retirement is to you.