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Tax Breaks Everyone Over 50 Should Know

One of the many joys of being a senior is making the most out of all the benefits that are handed to you. But did you know that these benefits go beyond discounts at your favorite diner? Take taxes, for example. Allow Maggi Tax to show you all of the tax breaks you could qualify for if you’re over 50!

Seniors Over 65 Have Higher Standard Deductions

One of the most common tax breaks that seniors see is in their standard deductions. Most people fall under a certain limit which can change ever so slightly depending on if they’re a single filer or filing jointly as a married couple. Seniors over 65 will have these standard deductions just like everyone else, plus some extra. These extra deductions can compound if you have certain disabilities.

Take a look at these examples for tax year 2023:

  • Standard deductions for single filers is $13,850
  • Standard deduction for married people filing jointly is $27,700
  • Single filers over 65 get an extra $1,850 tacked onto their standard deduction
  • Married people over 65 filing jointly get an extra $1,500 tacked onto their standard deduction

As you know by now, the higher your deductions, the less you are taxed. An extra thousand or two may not feel like a lot in the grand scheme of things, but every little bit adds up when it comes time for your tax person to run the calculations.

Over 50 And Employed? Make Larger Contributions To Your Retirement Plan!

Not everyone is itching to retire immediately, and that’s a-okay! If you’re still employed and are at least 50 years of age, you can make use of your hard work and dedication with larger contribution limits to your retirement plan so you can enjoy even more by the time you’re ready to finally call it quits.

As of now, the contribution limit for a retirement account is $23,000. For someone who wants to maximize their savings as much as they can each year while cutting down on taxes, this can be a detriment. However, employees over 50 can contribute an extra $7,500 on top of the standard for a grand total of $30,500. Just think of how much that can turn into by the time you collect!

Make A Catch-Up Contribution To Your HSA If You Turned 55

Another way to cut down on the taxes you owe is by contributing to a Health Savings Account or HSA. These accounts have much lower limits compared to retirement accounts, with those limits being $4,150 for single coverage and $8,300 for families. But if you just so happen to have turned 55 during the tax year, you have the opportunity to throw in an extra $1,000.

You Can Now Wait Until 73 To Make Withdrawals

Some seniors might try to stock up on their retirement savings until they absolutely need it, but certain rules keep them from doing so. For instance, you must start making minimal withdrawals from your retirement account once you reach a certain age or else you may be faced with penalties. The good news is that the age requirement has been extended to 73 as of 2023. So go ahead and keep saving up for a little bit longer!

Receive More Retirement Plan And Tax Guidance From Maggi Tax!

At Maggi Tax, we know our way around a retirement plan. Call our helpful financial advisors at (727) 799-1701 for retirement plans and tax services near you! We’ll help you discover all of the possible ways that you can save on taxes, including finding any tax breaks that you may qualify for. Contact us today to start handling your retirement funds the right way!

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