It is said that with age comes wisdom. Another lesser-known benefit is that it can also reduce taxes in retirement. Once your birthday cake has 50 candles on it, the IRS starts to lighten up a bit. And when you hit 65, the IRS has a few more small presents for you — if you know where to look.
Here are six tax deductions and credits you don’t want to miss after you’ve blown out all those candles.
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1. A higher standard deduction
If you take the standard deduction instead of itemizing, you'll be able to deduct the amounts in the table below when you file your taxes in 2026. Importantly, people 65 and older or blind are also eligible for an additional add-on amount that gets higher if you're also unmarried and not a surviving spouse.
Filing status | Deduction amount |
|---|---|
Single | $15,750. |
Married filing separately | $15,750. |
Head of household | $23,625. |
Married filing jointly | $31,500. |
Surviving spouses | $31,500. |
For the 2025 tax year (taxes filed in 2026), you can add an additional $1,600 to your standard deduction if you're 65 and older or blind; if you're unmarried and not a surviving spouse, you can add $2,000.
2. A new senior bonus deduction
New for the 2025 tax year (taxes filed in 2026), people ages 65 and older are also eligible for an additional deduction of up to $6,000 on top of their super-charged standard deduction. This new deduction, ushered in by the "One Big Beautiful Bill Act," is above the line, which means that you don't need to itemize in order to take it.
Importantly, note the income limits associated with this perk. In 2025, the highest your modified adjusted gross income could be as a joint filer is $150,000 and $75,000 as a single filer or head of household to qualify for the full benefit. If your income exceeds these amounts, the deduction decreases, potentially to $0 for some high earners.
3. More room to shelter income
Because contributions to a 401(k) are tax-advantaged, the IRS limits how much you can contribute each year.
In 2026, the 401(k) contribution limit for people under 50 is $24,500. The catch-up contribution limit for those 50 and older got a $500 boost — rising to $8,000 — which makes the total contribution limit for this group $32,500 in 2026. And due to changes to the Secure 2.0 Act, people ages 60 to 63 get a special catch-up contribution limit of $11,250.
But alas, this assumes that you’re still working and that your employer offers a 401(k) plan. If you’re no longer working, you may still be able to contribute an extra $1,100 a year to a traditional IRA or a Roth IRA (if you qualify for a Roth). That’s thanks to the IRS's catch-up provision for people 50 and older.
4. The deduction for medical expenses
If you itemize, you may be able to deduct unreimbursed medical expenses — but only the amount that exceeds 7.5% of your adjusted gross income. For example, if your adjusted gross income is $40,000, the threshold is $3,000, meaning that if you rang up $10,000 in unreimbursed medical bills, you might be able to deduct $7,000 of it from your taxes in retirement.
And if you’ve recently purchased long-term care insurance, you may be able to add in $480 to $6,020 in 2025, depending on your age. In 2026, this range rises to $500 to $6,200. The older you are, the more you can deduct from your taxes in retirement.
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
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on TaxRise's website
AD
Owe $10,000+ or More? This Tax Season Could Be Your Chance to QualifyEach year the IRS writes off millions in tax debt, yet few have applied.
on Anthem Tax Services' website
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5. A safety net for selling that empty nest
This tax deduction is available to everyone regardless of age, but it’s especially useful if you're itching to sell your house and downsize in retirement. The IRS lets you exclude from your income up to $250,000 of capital gains on the sale of your house. That’s if you’re single; the exclusion rises to $500,000 if you’re married.
So, if you bought that four-bedroom ranch house back in 1984 for $100,000 and sold it for $350,000 today, you likely won’t have to share any of that gain with Uncle Sam. There are a few conditions, though:
- The house has to have been your primary residence.
- You must have owned it for at least two years.
- You have to have lived in the house for two of the five years before the sale, although the period of occupancy doesn’t have to be consecutive. (People who are disabled, and people in the military, Foreign Service or intelligence community can get a break on this, though. See IRS Publication 523 for details.)
- You haven’t excluded a capital gain from a home sale in the past two years.
- You didn't buy the house through a like-kind exchange (basically swapping one investment property for another, also known as a 1031 exchange) in the past five years.
- You aren't subject to expatriate tax.
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6. More help if you’re disabled
You may qualify for a $3,750 to $7,500 tax credit, depending on your filing status, if you or your spouse retired on permanent and total disability. IRS Publication 524 has all the details.
But beware of some potential roadblocks if you're relying on it to cut your taxes in retirement. First, pensions and Social Security benefits can cause you to exceed the income limits. Plus, the tax credit is nonrefundable, which means that if you owe $250 in taxes but qualify for a $5,000 credit, for example, you won’t get a check from the IRS for $4,750. But at least you'll get to enjoy a $0 tax bill.
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