Retire AZ Style News

Top 3 Overlooked Tax Breaks for Retirees

February 14th, 2018 12:49 PM by Sharon Mason

Top 3 Overlooked Tax Breaks for Retirees

Finally retired? Congratulations! In addition to being the boss of your own time, retirement affords you a variety of new tax breaks that aren’t available to younger people. But are you aware of all the tax breaks you can claim? Here are the top 3 overlooked tax breaks for retirees.

1.) Bigger Standard Deduction: When you turn sixty-five, the IRS offers a gift in the form of a bigger standard deduction. The extra $1,550 will make it more likely you’ll take the standard deduction rather than itemizing and, if you do, the additional amount will save you almost $400 if you’re in the twenty-five percent bracket. Couples in which one or both spouses are age sixty-five or older also get bigger standard deductions than younger taxpayers.

2.) Medical Expense Deductions: Until 2017, taxpayers age 65 and older get a break when it comes to deducting medical expenses. Those who itemize get a money-saving deduction to the extent their medical bills exceed 7.5 percent of adjusted gross income. For younger taxpayers, the AGI threshold is ten percent. If you’re married, only one spouse needs to be sixty-five to use the 7.5 percent threshold.

3.) IRA Contributions: If you’re married and your spouse is still working, he or she can contribute up to $6,500 a year to an IRA that you own. If you use a traditional IRA, spousal contributions are allowed up to the year you reach age 70 ½. If you use a Roth IRA, there is no age limit. As long as your spouse has enough earned income to fund the contribution to your account (and any deposits to his or her own), this tax shelter’s doors remain open to you.

If you or someone you know is retiring this year or are seeking a retirement home in Sun City, please give me a call today. I can help you find the perfect Arizona retirement community where you can enjoy your golden years!

Your Arizona Retirement Expert,
Sharon Mason
RE/MAX Professionals
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