New Tax Return Version for Seniors
In 2019, the IRS introduced a new version of the income tax form for individuals age 65 and older. The form is the same as the Form 1040 (U.S. Individual Income Tax Return), but it features larger font and an easy to read table that lists the various standard deduction amounts. These new features attempt to increase awareness of the higher standard deduction amount available to seniors age 65 or older.
Higher Standard Deduction
The normal standard deduction amount for an individual filing as single in 2020 is $12,400 ($24,800 for married individuals filing jointly). However, there is a higher standard deduction amount for individuals who are 65 years of age or older, and for individuals who are blind. If you satisfy the age or blindness condition, then you may claim an additional standard deduction amount of $1,650 (or $1,300 if married filing jointly). If you satisfy both the age and blindness conditions, then you may claim an additional $3,300 (or $2,600 if married filing jointly). Note also that the higher standard deduction amount varies based on your filing status and, if applicable, whether your spouse qualifies based on one or both conditions. For more information, see the FAQ on this topic below.
Required Minimum Distribution
& Retirement Accounts
Unfortunately, federal law does not allow you to keep retirement funds in your account indefinitely without taking any withdrawals from the account. The required minimum distribution (RMD) is the minimum amount you must withdraw from your retirement account each year to avoid penalties. For more information, see the FAQs below.
Social Security Benefits: Taxable?
Your social security benefits may be taxable if the total of one-half of your benefits, plus all of your other income (including tax-exempt interest) is greater than the base amount for your filing status. The base amount for your filing status is:
$25,000 if you are single, head of household, or qualifying widow(er);
$25,000 if you are married filing separately and lived apart from your spouse for the entire year;
$32,000 if you are married filing jointly; or
$0 if you are married filing separately and lived with your spouse at any time during the tax year.
Use the IRS's Interactive Tax Assistant tool to quickly determine whether your benefits are taxable. For more information, see the FAQ on this topic below.