Tax Breaks Overlooked by New Retirees
The IRS offers several advantages to newly retired taxpayers. Don't miss out.

So you've put enough aside to enjoy a comfortable retirement. Good for you! But you're not off the hook just yet, at least not if you want to make sure you don't pay more taxes than you need to. Now that you're no longer working, your tax situation is different, too.
Here are three of the most overlooked tax breaks for the newly retired.
Bigger Standard Deduction
When you turn 65, the IRS offers a gift in the form of a bigger standard deduction. For 2015, for example, it's $7,850 for a 65-year-old single, versus the standard deduction of $6,300 for younger singles. The extra $1,550 will make it more likely you’ll take the standard deduction rather than itemizing and, if you do, the additional amount will save you almost $400 if you’re in the 25% tax bracket. Couples in which one or both spouses are age 65 or older also get bigger standard deductions than younger taxpayers.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Easier Medical Deductions
It also gets easier to deduct medical expenses. Those 65 and older who itemize these get a money-saving deduction to the extent their medical bills exceed 7.5% of adjusted gross income. For younger taxpayers, the income threshold is 10%.
Spousal IRA Contributions
And remember that retirement doesn't necessarily mean an end to the chance to shovel money into an IRA and enjoy the tax breaks that come along with it. If you’re married and your spouse is still working, he or she can contribute up to $6,500 a year to an IRA that you own, assuming you’re at least 50 years old. If you use a traditional IRA, spousal contributions are allowed up to the year you reach age 70 and a half. If you use a Roth IRA, there is no age limit. As long as your spouse has enough earned income to fund the contribution to your account -- and any deposits to his or her own -- this tax shelter’s doors remain open to you.
Check out even more overlooked tax breaks for the newly retired.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

In his former role as Senior Online Editor, David edited and wrote a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, David worked on numerous Kiplinger publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He co-hosted Your Money's Worth, Kiplinger's podcast and helped develop the Economic Forecasts feature.
-
Stock Market Today: Good Feelings and Solid Data Lift Stocks
Resilience and de-escalation defined another generally positive day for financial markets.
-
Five Home Upgrades for Surviving Record-Breaking Heat
With global temperatures expected to hover at record highs for years to come, now’s the time to upgrade your home for long-term heat resilience.
-
Homeschoolers: 529 Plan Savings Could Soon Work for You
Savings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Ohio Announces Two-Week Sales Tax Holiday Amid Tariffs, High Prices
State Tax Ohioans won't want to miss out on savings as pressure from tariffs spikes prices.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the Senate
Tax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify
Tax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025
Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
New 'No Tax on Tips' Bill Approved: What to Know Now
Income Taxes Will you stop paying taxes on your tip income this year?
-
Millions Could Lose SNAP Food Benefits Under Trump Tax Cut Plan
Tax Policy The House Agriculture Committee approved nearly $300 billion in cuts to SNAP benefits, putting many at risk of hunger.
-
Missouri Leads Capital Gains Tax Repeal: Will Your State Follow?
State Tax As one state becomes a test case, policymakers and taxpayers across the U.S. will be watching closely to see what happens next.