How Seniors Can Save Up to $1,500 in Taxes This Filing Season
Written by
Cara Danielle Brown
Edited by
Zuri Anderson
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Everyone wants to save money on taxes. But for seniors — many of whom live on fixed incomes — minimizing tax bills can feel particularly important.
Given several new and existing provisions in tax laws, GOBankingRates chat with experts to find out how seniors can save up to $1,500 in taxes this filing season.
Additional Deductions for Seniors 65 and Older
Roxanne Hendrix, certified public accountant (CPA) and tax expert at JustAnswer, explained that, as a result of the One, Big Beautiful Bill Act (OBBBA), effective for 2025 to 2028, seniors 65 and older may claim an additional $6,000 deduction for single tax filers and an additional $12,000 for joint tax filers (where both qualify), therefore decreasing taxable income.
This is in addition to the current, standard deduction, and is available for both itemizing and non-itemizing tax payers. This deduction phases out for single tax filers with a Modified Adjusted Gross Income (MAGI) over $75,000 for and for joint tax filers with a MAGI over $150,000.
Increased SALT Cap
As part of the OBBBA, the Federal and State Local Tax (SALT) deduction cap is temporarily increased to $40,000 (up from $10,000) for both single and joint filers from 2025 to 2029. This can be particularly beneficial for seniors living in high-tax states. The full deduction phases out for tax payers with a MAGI above $500,000. However, individuals must itemize to receive the deduction.
Qualified Charitable Distributions
According to David Kang, CEO and enrolled agent at Keeper, qualified charitable distributions (QCD’s) from IRAs often “provide an avenue for retirees to give directly to charity, up to the annual limit.” In addition to supporting worthy causes, these contributions are subtracted from one’s taxable income –proving particularly beneficial as seniors begin taking required minimum distributions (RMDs). Through 2025, only tax payers who itemize can deduct charitable contributions.
Medical and Dental Expenses
Amy Loftsgordon of Nolo.com stated seniors can deduct medical and dental expenses that exceed 7.5% of their Adjusted Gross Income (AGI) on Schedule A of their tax return — a limit many retirees more than exceed as health care costs mount in old age. To qualify, tax payers must itemize personal deductions like health insurance premiums, long term care insurance premiums, prescription drugs, etc.
Energy Efficiency Tax Credits
Seniors who own their homes and have “gone green” can take advantage of the energy efficiency tax credits. These credits were extended through 2032 by the Inflation Reduction Act and, per Kang, return up to 30% of the cost of qualifying upgrades, capped at a maximum of $3,200 annually.
Withdrawal Timing and Structure
Seniors should plan carefully regarding when and how they take income from retirement accounts.
“The combination of Social Security, pensions, IRA withdrawals, dividends and part-time wages influences whether benefits are taxed and if higher marginal rates are triggered,” stated Joseph Perry, tax professional at CBIZ. Small adjustments to distributions “can help keep more money in lower tax brackets or reduce the portion of Social Security that is taxed.”
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