Don't Overlook These Age-Related Deductions
Living the retired life is a wonderful thing. But now that you might be on a fixed income, it's important to make sure you have enough savings to cover the rest of your life. This also means taking advantage of every tax break you can.
Here's a list of the most over-looked tax breaks offered to retirees:
- Celebrate Your 65th Birthday with a Bigger Standard Deduction. When you turn 65 the IRS gives you a gift in the form of a bigger standard Deduction, especially couples in which one or both spouses are 65 and older. Make sure you take advantage of your age!
- Spousal IRA Contribution. Being retired doesn't mean you have to stop dumping money into an IRA. If you are married and your spouse is still working, he or she can contribute up to $7,000 a year into an IRA that you own. As long as your spouse has enough earned income to fund these contributions, it remains a wonderful tax break.
- Give Money to Charity. We all know that giving to charity is a tax deduction. But once you reach age 70 ½, there's a tax-friendly way to donate to charity without having to itemize. You can transfer up to $100,000 each year from your traditional IRAs directly to charity. The transfer is excluded from taxable income, and it counts toward your required minimum distribution. If you do itemize, make sure you don't claim the tax-free transfer as a charitable deduction on Schedule A- that's a no no!
Keep reading to learn about more tax breaks you might qualify for!
Do you need help preparing for or navigating your retirement? Our qualified Wealth Management Team can answer your questions and provide quality advice to help you achieve the retirement of your dreams.
