Tax Tips for Older Adults: Simplifying the Process

By Julie HayesFebruary 17, 2025

Filing taxes can be a daunting task, particularly for older adults who may have unique financial circumstances or qualify for certain deductions that others may not. Add that to the fact that tax laws frequently change and even accidental inaccuracy can cause numerous issues, it’s no wonder that most people face tax season with dread.

Fortunately, with some basic knowledge and the right resources, older adults can approach their taxes with confidence and ensure their returns are both accurate and optimized for their financial benefit.

Special Tax Considerations for Older Adults

As we age, there are certain tax breaks and benefits designed specifically for older adults. If you fall into this category, here are some key items to keep in mind:

  1. Higher Standard Deduction: Taxpayers aged 65 and older are eligible for a higher standard deduction. For the 2023 tax year, single filers aged 65+ can claim an additional $1,950, and married filers aged 65+ can each add $1,550 to their standard deduction. This can significantly reduce taxable income.
  2. Tax Credit for the Elderly or Disabled: If you’re 65 or older (or retired due to a disability), you may qualify for this credit, provided your income does not exceed a certain threshold.
  3. Medical Expense Deductions: Older adults often have significant healthcare expenses, which may be deductible if they exceed 7.5 percent of your adjusted gross income. Eligible expenses can include premiums for Medicare or long-term care insurance, prescription medications and out-of-pocket healthcare costs.
  4. Retirement Income and Social Security: Social Security benefits may or may not be taxable, depending on your overall income. Additionally, withdrawals from retirement accounts like IRAs or 401(k)s may be taxable. It’s important to understand these rules to avoid underpayment or overpayment of taxes.
  5. State Property Tax or Rent Rebates: Some states offer tax relief for older adults through property tax reductions or rent rebates. Check with your local tax authority to see if you qualify.

General Tax Filing Tips for Older Adults

  • Gather All Necessary Documents Early: Ensure you have all required tax forms, such as 1099s for Social Security or pension income, W-2s for work if you’re still employed, and 1099-Rs for retirement distributions. Keeping your records organized throughout the year can save you time and stress during tax season.
  • Consider Itemizing Deductions: While the standard deduction is higher for older adults, some may benefit from itemizing deductions, especially if they have significant medical or charitable expenses.
  • Review Tax Credits and Deductions: In addition to the above, ensure you claim any credits or deductions you’re eligible for, such as charitable donations, energy-efficient home improvements or education expenses for lifelong learning.
  • Be Aware of Scams: Older adults are frequently targeted by scammers posing as IRS agents. The IRS will never initiate contact by phone, email or social media. If you’re contacted, hang up and report the incident to the IRS or your local authorities.

What If You Don’t Feel Confident Filing Taxes on Your Own?

Not everyone feels confident navigating the tax process alone—and that’s OK. There are plenty of resources available to assist older adults:

  1. Benjamin Rose’s Free Income Tax Preparation: Benjamin Rose offers free Volunteer Income Tax Assistance (VITA) services for older adults in the Greater Cleveland area. Participants can take advantage of a drive-up tax service where IRS-certified volunteers handle tax filing while participants remain in their vehicles. This convenient and stress-free service ensures accurate filing and helps older adults claim all eligible credits and deductions. To schedule an appointment, visit Benjamin Rose’s website or visit http://www.refundohio.org.
  2. Other VITA programs: The IRS also offers this service across the country. Not sure if there’s a VITA location near you? Use the IRS’s VITA locator to see if any local community centers or organizations that provide tax support.
  3. AARP Foundation Tax-Aide: AARP offers free tax help specifically tailored for older adults. Their Tax-Aide program is available at various locations and can assist with both in-person and virtual tax preparation.
  4. Online Tax Software: For those comfortable with technology, many tax preparation software programs are user-friendly and designed to walk you through the filing process. Some even offer free options for simple returns.

Plan Ahead for Peace of Mind

By planning ahead and utilizing available resources, older adults can take the stress out of tax season. Whether you opt to prepare your taxes yourself or seek assistance, remember that help is available to ensure your taxes are filed accurately and on time. Don’t hesitate to take advantage of programs near you, and remember that the sooner you file, the more time you have to respond to issues you may encounter, such as missing documents and receipts.