With the April 15th, 2024, deadline for filing your 2023 tax return looming up ahead, it’s important for seniors to understand options for lowering the amount you may owe to Uncle Sam.
Higher Filing Threshold For People Age 65 & Older
For older people, the threshold for filing an income tax return is a bit more than it is for younger people. If you turned 65 by the end of 2023, your gross income in 2023 needs to be at least $15,700 before you’re required to file a federal tax return. For a head of household, the threshold is $22,650. If one spouse in a married couple filing jointly is over 65, the threshold is $29,200. If both spouses are 65 and over, it’s $30,700. For a surviving widow(er) over 65, the threshold is $29,200.
Taxpayers Age 65 & Older Get An Additional Standard Deduction
If you’re age 65 and older, or considered legally blind, you can add an additional amount to the existing 2023 standard deduction. If you’re a single taxpayer age 65 and older, you can add $1,850 to $13,850 standard deduction. If you’re 65 or older and also blind, add $3,700 to $13,850 standard deduction. If you’re married and filing jointly or separately, add $1,500 per qualifying spouse to the $27,700 standard deduction. If you’re 65 or older and also blind, add $3,000 per qualifying spouse to the 27,700 standard deduction.
“In most cases, long-term care (LTC) insurance premiums are also tax deductible depending on your age, total medical expenses and your policy.”
Think About Itemizing Qualified Medical Expenses
If you have high out-of-pocket medical expenses or long-term care insurance premiums, consider itemizing instead of taking the standard deduction. Itemizing these costs makes sense when your qualified medical expenses are at least 7.2% of your adjusted gross income (AGI). In most cases, long-term care (LTC) insurance premiums are also tax deductible depending on your age, total medical expenses and your policy. If you’re age 61 to 70, the IRS currently allows you to deduct up to $4,520 in LTC premiums. If you’re 71 and older, you can deduct a maximum of $5,640 in LTC premiums.
Higher Age Threshold For RMDs In 2023
Effective January 1, 2023, the SECURE Act 2.0 increased the RMD age to 73 for those born after December 31, 1950, to help you save on taxable withdrawals from your Thrift Savings Plan. Also keep in mind that the Trump Tax Cuts (TCJA) will expire at the end of 2025 which means you’ll likely be paying higher federal income taxes starting on January 1, 2026.
To learn more, connect with an FRC® trained advisor in your area.
