The Perks of Aging
Dear <<First Name>>,
Once you turn 50, and especially after age 65, or are retired, you can qualify for tax breaks to help minimize your tax burden. If you or a loved one fall into these categories, here are seven of the most important tax deductions to use to your advantage:
1. Larger Standard Deduction
If you and/or your spouse are 65 years old or older and you do not itemize your deductions, you can take advantage of a higher standard deduction amount.
2. Credit for Elderly or Disabled
If you and/or your spouse are either 65 years or older–or under age 65 years old and are permanently and totally disabled–you may be able to take the Credit for Elderly or Disabled. The Credit is based on your age, filing status, and income.
3. Medical and Dental Expenses Deduction
The Tax Reform and Jobs Act of 2017, changed the AGI threshold for medical expenses from 10% to 7.5% for 2017 and 2018 for all taxpayers.The medical expense tax deduction covers the cost of insurance premiums, including Medicare, and even long-term care insurance premiums.
4. Higher HSA contribution limit
Workers with high-deductible health plans can claim a tax deduction on contributions to a health savings account. HSA limits are $3,500 if single or $7,000 for family, but you can add an additional $1,000 into your account if you are over 50.
5. Retirement account limits
For 2019, the IRS increased the amount you can squirrel away in your 401(k), 403(b) and most government plans. Once you reach 50, a $6,000 “catch up” contribution is available or $22,500 into your 401(k) in 2019.