Medora LeeUSA TODAY
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Senior discounts are commonplace in restaurants, but there's one for taxes too. It's called the extra standard deduction, exclusively for people who are 65 years and older by the end of the tax year.
Everyone knows about the standard deduction, which is a flat dollar amount determined by the IRS that lowers your taxable income without having to itemize deductions like mortgage interest and charitable donations. That one is available to everyone, but older adults get an additional one on top of the standard deduction.
A larger overall deduction for older adults further reduces their taxable income, and that means a smaller tax bill and more money in your pocket.
Here's how it works.
Who’s eligible for the extra standard deduction?
Taxpayers who are 65 years or older.Theamount of the additional standard deductionvaries depending on filing status; whether you or your spouse is at least 65 years old;and whether you or your spouse is blind.
For tax year 2023, you're considered 65 if you were born before Jan. 2, 1959, the IRS said. If you or your spouse were also legally blind by year's end or have a doctor's note explaining why you should be considered blind, you can claim an even larger additional deduction. You also can’t be claimed as a dependent or itemize your taxes, among other things.
People who are blind and under 65 receive the additional standard deduction, not the larger one.
How much is the additional standard deduction?
For tax year 2023, the additional standard deduction amounts for taxpayers who are 65 and older or blind are:
- $1,850 for single or head of household
- $1,500 for married taxpayers (per qualifying person) or qualifying surviving spouse(a married couple of two 65+ adults would take a total deduction of $27,700 (standard deduction) + $1,500 for one 65+ adult + $1,500 for second 65+ adult = $30,700)
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
- $3,000 per qualifying individual if you are married, filing jointly or separately
The above amounts are in addition to the regular standard deductions of:
- $13,850 if single or married filing separately
- $20,800 ifhead of household
- $27,700 ifmarried filing jointly or qualifying surviving spouse
Should I itemize or take the standard deduction?
Nearly 90% of Americans take the standard deduction, IRS data from tax year 2020 show.
However, whether you should itemize or not depends on whether the total of your itemized deductionstops your standard deduction or whether you must itemize deductions because you can't use the standard deduction, the IRS says.
Hints to whether you may benefit from itemizing, without doingdetailed calculations, could lie in whether youhad a major life event like buying or selling a home; incurred significant medical expenses; or made sizable donations.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] subscribe to our freeDaily Money newsletterfor personal finance tips and business news every Monday through Friday.
