You’ve probably heard about the standard deduction, but did you know that the tax code offers a perk in the form of an extra standard deduction for people aged 65 or older?
For eligible older adult filers, the additional deduction stacks on the regular standard deduction and can further reduce taxable income. That, in turn, can increase the amount of hard-earned money you keep in retirement.
Here’s more of what you need to know.
What’s the 2023 standard deduction?
Before delving into the extra standard deduction for older adults aged 65 and older, reviewing the regular standard deduction and how it works for 2023 is helpful.
The standard deduction is a predetermined amount that reduces your taxable income, lowering the income subject to tax. In most cases, whether to take the standard deduction (which most taxpayers choose to do) is up to you. (However, some taxpayers cannot claim the standard deduction.)
The alternative is to itemize deductions, which involves claiming individual deductions on your federal income tax return. Common itemized deductions include things like mortgage interest and charitable donations.
The amount of your standard deduction depends on several different factors. For example:
- Your filing status
- Whether you are 65 or older
- Whether you are blind
- Whether another taxpayer can claim you as a dependent on their tax return
For 2023 (tax returns typically filed in April 2024), the standard deduction amounts are $13,850 for single and for those who are married, filing separately; $27,700 for those married filing jointly and qualified widowers; and $20,800 for head of household.
IRS extra standard deduction for older adults
When you turn 65, you become eligible for an additional standard deduction on top of the regular standard deduction. However, the amount of this extra deduction can vary based on factors like filing status and whether you or your spouse are 65 or older. Whether you or your spouse is blind is another factor.
For 2023, the additional standard deduction is $1,850 if you are single or file as head of household. If you’re married, filing jointly or separately, the extra standard deduction amount is $1,500 per qualifying individual.
If you are 65 or older and blind, the extra standard deduction is $3,700 if you are single or filing as head of household. It’s $3,000 per qualifying individual if you are married, filing jointly or separately.
|65 or older or blind||$1,850|
|65 or older and blind||$3,700|
|65 or older or blind||$1,500 per qualifying individual|
|65 or older and blind||$3,000 per qualifying individual|
Note: For the additional standard deduction for people who are blind, you have to be completely blind by the end of a given tax year. Or, you have to have a doctor’s certification (in this case, an ophthalmologist or optometrist) that your eyesight is at least 20/200 (in the best eye with corrective lenses.) Or, your doctor must certify that your field of vision is 20 degrees or less.
The just-released additional standard deduction amount for 2024 (returns usually filed in early 2025) is $1,550 ($1,950 if unmarried and not a surviving spouse).
Claiming the extra standard deduction
As retirees tend to face rising medical and other expenses, the extra standard deduction for individuals 65 and older can help alleviate tax burdens by reducing taxable income. This boost may free up funds for essential needs, leisure activities, or to support loved ones.
If you are eligible to claim the extra standard deduction and aren’t sure how it impacts your tax liability, consult a trusted tax professional or official IRS resources to maximize your tax benefits.
Contact the Pinnacle CPA Advisory Group
If you need help with your personal or business taxes, or any type of professional accounting services, contact the experts at Pinnacle CPA Advisory Group. Call our Columbus offices at (614) 942-1990, send email to us at firstname.lastname@example.org, or just fill out the Contact form on this website, at cpaagi.com/contact.