Reaching a certain age unlocks a range of tax advantages that younger workers can’t access, offering seasoned earners unique financial opportunities.
As they approach retirement, individuals over 50 can tap into a range of tax breaks designed to ease their financial journey.
Turning 50—and particularly reaching 65—can unlock a host of additional tax benefits. Older adults enjoy a larger standard deduction and higher income thresholds before filing is required. Those over 50 can also defer or reduce taxes on significant sums through retirement and health savings accounts, maximizing their financial flexibility as they approach retirement.
Here are 10 tax breaks for people over 50:
- Bigger standard deduction
- Higher tax-filing threshold
- Property tax breaks
- Credit for the elderly and disabled
- Additional IRA deduction
- 401(k) catch-up contributions
- No more early withdrawal penalty
- Qualified charitable distributions
- Higher HSA contribution limit
- Free tax help
If you don’t itemize deductions, reaching 65—or having a spouse who has—lets you claim a larger standard deduction. For 2025, seniors filing as individuals can add $2,000 to the standard deduction compared with those under 65. Married couples see an increase of $1,600 if one spouse is 65 or older, and $3,200 if both meet that age threshold. Additionally, taxpayers who are blind—or have a blind spouse—may qualify for an even higher standard deduction, further boosting their tax advantage.
Higher Tax-Filing Threshold
Seniors can earn more than younger workers before they are required to file a tax return. For 2024, individuals aged 65 and older can report up to $16,550 in gross income without filing—$1,950 higher than their younger counterparts. For couples, the filing threshold rises to $32,300 if both spouses are 65 or older, or $30,750 if only one meets that age, compared with $29,200 for younger couples. Even so, those below the threshold may still choose to file to claim tax credits or receive refunds on withheld income taxes, making it a potentially valuable financial move.
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Property Tax Breaks
Property tax regulations differ widely across states and local jurisdictions. In certain areas, seniors with incomes below specified thresholds may qualify for deferrals or exemptions on property or school taxes, offering valuable financial relief.
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In Texas, for instance, homeowners aged 65 and older can receive a $10,000 homestead exemption on school district taxes, in addition to the standard exemption available to all homeowners. Local jurisdictions may offer additional senior-specific exemptions, so it’s important to review your area’s eligibility rules carefully. Claiming these benefits often requires submitting extra tax forms or a formal application.
Credit for the Elderly and Disabled
Seniors with limited income—age 65 or older, or with a spouse in that age group—may qualify for a valuable tax credit. To claim it, retirees must have an adjusted gross income below $17,500, or $25,000 if both spouses meet the age requirement, with nontaxable Social Security and pension income under $5,000, or $7,500 for couples. If only one spouse qualifies, the income limit rises to $20,000. Younger individuals who are permanently disabled may also be eligible, with the credit ranging from $3,750 to $7,500.
Additional IRA Deduction
Older workers have the advantage of deferring income taxes on larger contributions to an individual retirement account. Those aged 50 and above can add an extra $1,000 to their IRA, allowing a total contribution of $8,000 in 2025.
A 50-year-old worker in the 24% tax bracket who maxes out their IRA could reduce their current tax bill by $1,920—$240 more than the maximum $1,680 tax break available to younger savers in the same bracket. Additionally, low- and moderate-income seniors contributing to a retirement account may qualify for the Saver’s Credit, further enhancing their retirement savings benefits.
401(k) Catch-Up Contributions
Older employees with a 401(k) plan have the advantage of making catch-up contributions. Workers aged 50 and above can defer income taxes on an additional $7,500 beyond what younger employees can contribute, bringing the total 401(k) contribution limit to $31,000 in 2025.
A 24% tax-bracket worker aged 50 or older who maxes out their 401(k) could reduce their current tax bill by $7,440—$1,800 more than a younger employee in the same bracket. Taxes on these contributions are deferred until the money is withdrawn, allowing for greater immediate savings and long-term growth.
No More Early Withdrawal Penalty
Younger workers who tap into their retirement accounts face a 10% early withdrawal penalty, except for certain qualifying circumstances. But once you reach 59 ½, IRA funds can be withdrawn for any reason without incurring this penalty. Workers who leave a job at age 55 or older can take penalty-free distributions from the 401(k) linked to their most recent employer. Public safety officers with at least 25 years of service in a plan-sponsored position may begin penalty-free withdrawals at age 50. Keep in mind, however, that income taxes still apply to distributions from traditional retirement accounts at any age.
Qualified Charitable Distributions
Retirees are generally obligated to take withdrawals from traditional retirement accounts and pay the associated income taxes. However, if the funds aren’t needed, a qualified charitable distribution from an IRA allows retirees to bypass income tax on the withdrawal while supporting a charitable cause.
Retirees aged 70 ½ and older can transfer up to $108,000 directly from their IRA to a qualified charity in 2025 without owing income tax on the transaction. Even modest contributions offer significant tax benefits: a $5,000 charitable IRA transfer could reduce a 24% taxpayer’s bill by $1,200, while a $1,000 donation could save $240 in taxes.
Higher HSA Contribution Limit
Workers with high-deductible health plans can deduct contributions to a Health Savings Account (HSA), with withdrawals remaining tax-free when used for qualifying medical expenses. Individuals aged 55 or older by the end of 2025 can contribute up to $5,300—$1,000 more than younger account holders. However, HSA contributions are no longer permitted once you enroll in Medicare.
Free Tax Help
Seniors can access tax-filing assistance without incurring steep hourly fees. The Tax Counseling for the Elderly (TCE) program offers free support to individuals aged 60 and older. IRS-certified volunteers help older taxpayers prepare basic returns and file electronically from January 1 through April 15 each year. The program focuses on the tax issues seniors most often encounter, including questions about pensions and retirement benefits.
