Like a pair of stiff jeans, taxes become more forgiving over time. That’s because Americans become eligible for more and more deductions, tax credits and exemptions as they approach retirement age. The best breaks are available to folks over 65, but you could benefit from lower taxes as soon as you turn 50.
However, lower taxes don't translate into easier taxes. Taking full advantage of these breaks requires some planning before the current tax year is over — like increasing your retirement account contributions or applying for state property tax exemptions. This roundup includes some of the most widely available tax breaks, yet it’s not exhaustive: You may be able to qualify for additional discounts through your state and local governments.
Catch-up contributions are additional funds that anyone over 50 is allowed to contribute to a retirement account — which you can deduct from your taxes if you earn less than $145,000 a year. This is nothing new, but the Secure Act 2.0 of 2022 has shifted how catch-up contributions will work for the next few years.
For the 2024 tax year, if you’re 50 or older, you can contribute an additional $7,500 to an eligible employee retirement account, for a total of $30,500 per year. Eligible accounts include:
401(k)s
403(b)s
SARSEP governmental 457(b) accounts
You can also make up to $3,500 in catch-up contributions on a SIMPLE 410(k) account, which is also deductible. Catch-up contributions of up to $1,000 are available on IRAs — but you can’t deduct this from your taxes.
Starting in 2025, taxpayers ages 60 and 63 years old can qualify for catch-up contributions on 401(k) as high as $10,000 — or 50% more than the normal catch-up contribution limit. Since rules around catch-up contributions are going through annual changes, consult with a tax specialist before making additional contributions to your account.
An IRA catch-up contribution might not be deductible, but it could boost your retirement savings contributions credit — or the “saver’s credit” — along with other catch-up contributions.
The saver’s credit is a tax credit available to low- and middle-income taxpayers. Credits run as high as $2,000 for individuals or $4,000 for married taxpayers filing jointly. This tax credit isn’t exclusive to older taxpayers, but since catch-up contributions increase the amount you can contribute to retirement accounts, they can also increase the saver’s credit you can receive.
The IRS calculates your credit based on 10% to 50% of your retirement savings contributions, depending on your income. See an estimate of your 2024 Saver’s Credit by answering a questionnaire on the IRS website.
There are a couple of healthcare-related deductions reserved for older taxpayers. Once you turn 55, you’re eligible to contribute additional funds to a health savings account — or an HSA. In 2023, you could contribute an additional $1,000, but that number is expected to increase in 2024.
This means if you’re 55 or older at the end of the tax year, you’re able to contribute $4,150 to your HSA if you use an individual healthcare plan and $8,300 if you use a family plan, plus at least $1,000. The IRS plans to increase the standard HSA contribution again in 2025: $4,300 for individual coverage and $8,550 for family plans. The IRS doesn’t tax HSA contributions, so you’ll lower your income tax the more you contribute to this type of account.
If you’re on Medicare, you get an additional tax break by being able to deduct your health insurance premiums in most cases. That’s because the IRS treats Medicare premiums as a medical expense, which you can deduct from your taxable income. But you must itemize your deductions to be eligible, and total medical expenses must be more than 7.5% of your adjusted gross income.
The IRS offers free assistance and basic tax return preparation to anyone ages 60 and older through the Tax Counseling for the Elderly program. This program is available through nonprofits that have received funding from the federal government. Volunteers who offer TCE services specialize in navigating income taxes related to pensions and retirement accounts — and many of them are retired themselves, according to the IRS.
The TCE includes the AARP’s Tax-Aide program, which specializes in assisting low and middle-income individuals over 60 with tax preparation. The Tax-Aide program is available in every state through easily accessible public spaces such as libraries, community centers and senior centers. Find a Tax-Aide location near you by visiting the AARP website during tax season.
Call 800-829-1040 for live assistance with the TCE and 888-227-7669 for more information about Tax-Aide.
Once you or your spouse turn 65, you can qualify for an additional standard deduction on top of the basic standard deduction you’d normally receive — or $14,600 for individuals and $29,200 for joint filers for the 2024 tax year.
Here’s additional 2024 standard deductions for those over 65 showing the IRS’s tax inflation adjustments:
Joint filers and surviving spouses can deduct an additional $1,550 per person over 65.
Single filers and heads of households can deduct an additional $1,950.
Claiming a standard deduction means that you won’t be able claim any itemized deductions — such as catch-up contributions to your 401(k). In some cases, the standard deduction might offer higher savings, but talk with a tax professional to make sure you aren’t missing any itemized deductions.
It’s easier to skip out on federal taxes altogether once you turn 65, thanks to higher filing thresholds for older taxpayers.
A breakdown of the maximum you can earn without filing isn’t yet available for the 2024 tax year, though you can get a sense of what to expect from 2023 tax year maximums:
Single filers over 65 must file taxes if they earned $15,700 or more.
Joint filers who are both over 65 must file taxes if they earned a combined $29,200 or more.
Joint filers where only one spouse is over 65 must file taxes if they earned $30,700 or more.
Heads of household must file taxes if they earned $22,650 or more.
Surviving spouses over 65 must file taxes if they earned $29,200 or more.
It’s likely these numbers will be adjusted for inflation in the 2024 tax year, so keep an eye out for updated thresholds closer to the 2025 tax filing season.
Married taxpayers need to file a joint tax return if they want to take advantage of the higher tax filing threshold. If you and your spouse pay your taxes separately, then you’re both required to file returns even if one of you earns as little as $5 — regardless of age.
The Tax Credit for the Elderly or Disabled allows low-income Americans ages 65 and older to claim a tax credit of $3,750 to $7,500, depending on your income, marital status and other factors.
However, your adjusted gross income needs to be close to the poverty line for some married couples. Even if your income does qualify, you might not be able to claim this tax credit if you earn more than a few thousand dollars in nontaxable income — such as Social Security, annuities or pensions.
Figuring out how much you qualify for — if you’re eligible at all — can get complicated. The IRS offers a step-by-step guide to figuring it out yourself. But since you’re eligible for free tax preparation services by the time you’re old enough for this tax credit, there’s no reason not to save that headache for the experts.
The IRS requires you to take a minimum distribution from your 401(k) and other traditional retirement accounts once you turn age 73. The government counts these withdrawals as income and taxes accordingly. However, you can get around this requirement by setting up a qualified charitable distribution — or QCD.
A QCD sends distributions to an eligible charity of up to $100,000 for individuals or $200,000 for eligible joint filers. Since QCDs allow you to make charitable contributions, you won’t have to pay taxes on these retirement account funds.
This isn’t technically a deduction — that income isn’t counted as taxable to begin with — so you can still take advantage of this tax break whether you claim standard or itemized deductions. But you can’t set up a QCD for a Roth IRA or 401(k), since Roth accounts do not have required minimum distributions as of 2024.
Many states offer breaks and exemptions on property taxes to residents over a specific age. Eligibility varies by state, but typically you’ll need to meet age, location and income requirements.
For example, Texas offers a wide range of property tax exemptions to residents ages 65 and older, including an exemption from school district and county taxes and an additional $10,000 residence homestead exemption. You might even get a tax break on your second home.
Even states that are known for relatively high taxes like New York State will reduce your property tax by as much as 50% if you’re over 65. You must have an income that’s below the maximum set for your municipality — which can range anywhere from $3,000 to $50,000, depending on where you live.
And because these tax breaks can be by town or community, you may need to submit an application to a local government before your tax season — as is the case with New York. So it may be worth looking into your options well before your taxes are due.
Answers to common questions about tax breaks for folks over 50.
No, there’s no longer a capital gains exemption specifically for seniors. Taxpayers over 55 were once allowed a one-time $125,000 in capital gains exemption for selling their home, known as the over-55 rule, but that rule was phased out in 1997.
There is a general capital gain exemption for the sale of a main home — as much as $250,000 for single filers and $500,000 for joint filers if you meet an ownership and use test — but there are no minimum age requirements currently for this exemption.
While many states won’t require you to pay taxes on Social Security, a handful of states do. Those that do typically offer some kind of tax break. Here’s a list of states that will likely tax some portion of Social Security in 2024:
Colorado generally taxes Social Security benefits over $20,000 for residents ages 55 to 64 and $24,000 for residents over 65.
Connecticut taxes 50% of the Social Security benefits you receive regardless of age or income.
Kansas taxes Social Security benefits only if your federal adjusted gross income is over $75,000 for individuals, regardless of your filing status.
Minnesota offers full and partial exemptions to residents earning less than around $118,000 a year for individuals, otherwise all benefits are subject to state tax.
Montana made an unsuccessful attempt to repeal a law that taxes Social Security benefits in 2023. It taxes Social Security the way the federal government does currently — with a $5,500 deduction for taxpayers over 65.
New Mexico only taxes Social Security benefits if you earn more than $100,000 as an individual, thanks to a new law passed in 2022.
Rhode Island allows some exemptions to residents with an annual income below $101,000 for individuals — and appears to be following the same requirements in 2024 as it did in 2023.
Utah charges taxes on Social Security, but offers a tax credit that you can calculate on the state government website. However, you can’t use this credit if you claim the state’s retirement credit.
Vermont offers a full Social Security tax exemption if your income is over $50,000 for individuals and a partial exemption for individuals who earn up to $60,000.
These laws change frequently, however. For example, Missouri and Nebraska taxed Social Security in 2023 but will not in 2024. Contact your state government before tax season begins for the most up-to-date information.
SECURE 2.0 Act of 2022 [PDF], U.S. Senate Committee on Finance. Accessed May 16, 2024.
Publication 502 (2023), Medical and Dental Expenses, IRS. Accessed May 16, 2024.
Publication 969 (2023), Health Savings Accounts and Other Tax-Favored Health Plans, IRS. Accessed May 16, 2024.
Tax Counseling for the Elderly, Benefits.gov. Accessed May 16, 2024.
IRS provides tax inflation adjustments for tax year 2024, IRS. Accessed May 16, 2024.
Publication 524 (2023), Credit for the Elderly or the Disabled, IRS. Accessed May 16, 2024.
Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts to charity, IRS. Accessed May 16, 2024.
Anna Serio-Ali is a trusted personal finance expert who specializes in consumer and business financing. A former certified commercial loan officer, Anna's written and edited more than a thousand articles to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in Business Insider, CNBC, Nasdaq and ValueWalk, among other publications, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020 for her work at Finder.
