Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025

You may find that your most fruitful tax breaks aren’t hiding in itemized deductions — but they may be waiting for you after age 65.

Data from the IRS shows that 90% of taxpayers choose the standard deduction over itemizing at tax time, including retirees.

But where do you start? When federal tax breaks, like the deduction for medical expenses, are disallowed for non-itemizers, claiming the standard deduction can seem counterintuitive.

From just $107.88 $24.99 for Kiplinger Personal Finance

Be a smarter, better informed investor.

CLICK FOR FREE ISSUE

Sign up for Kiplinger’s Free 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.

Sign up

Fortunately, there might be some good news this tax season for retirees. Five tax breaks are available to those 65 and older who are claiming the standard deduction on their 2025 income tax return (if you’re eligible). Here they are.

What tax deductions and credits can I claim with the standard deduction as a retiree over 65?

To find the five tax breaks available to those over 65 and retired (and who claim the standard deduction), Kiplinger first referenced IRS tax breaks available to this age group.

• Only tax credits and deductions were considered.
• Of those selected, tax breaks that could not be claimed with a standard deduction were disqualified.
• Additionally, federal tax breaks that required one or both spouses to work or go to school were excluded.
• Finally, information was gathered about state income tax breaks at large.

Even then, keep in mind that this listing is not exhaustive, and it’s important to check with your state’s Department of Revenue website regarding additional tax breaks for which you may be eligible. Consult with a qualified tax professional when necessary.

1. Extra standard deduction for retirees who are over 65

Not to be confused with the new standard deduction, the “extra standard deduction” is a tax break designed for those 65 and older to claim additional tax relief come filing time.

However, the amount of federal income tax relief you receive from the extra standard deduction depends on your filing status for the 2025 tax year:

• For married filing jointly couples and surviving spouses, the amount of the extra standard deduction is $1,600 per qualifying individual.
• For single filers or heads of household, the amount of the extra standard deduction is $2,000.

Additionally, if you or your spouse is blind, you may receive more relief. The extra standard deduction is $3,200 per qualifying individual aged 65 or older and blind (if married filing jointly) and $4,000 if single filing.

These amounts are stacked onto your regular standard deduction. So, for instance, if both you and your spouse are over 65, and your spouse is blind, the combined total of the standard deduction and extra standard deduction would be $36,300.

For more information on this tax break, check out Kiplinger’s report, The Extra Standard Deduction for People Age 65 and Older.

2. Bonus deduction for retired older adults

Introduced by the 2025 GOP spending bill, also referred to by some as the “big beautiful bill” (BBB), retirees may qualify for a new federal tax break, the bonus deduction.

Similar to the extra standard deduction, this temporary tax break is meant to provide relief to Americans 65 and older. It also stacks on top of the regular standard deduction and the extra standard deduction (though it can be claimed if you itemize).

Does this sound too good to be true? Maybe it is. Unlike the extra standard deduction, the bonus deduction has income limits that may preclude some retirees from claiming the tax break.

• The maximum deduction amount for married filing jointly couples is $12,000, while single filers may qualify for up to $6,000.
• However, the deduction amount begins to phase out for married couples who have $150,000 or more in income (single filers have a phaseout for income $75,000 or more).*
• The deduction is reduced by 6 cents for every $1 that’s over the phaseout threshold.
• The bonus deduction phases out completely when income is above $250,000 for couples and $175,000 for single filers.

So, for instance, if a qualifying single filer were over 65 and had $80,000 in income, their bonus deduction would be $5,700 ($5,000 over the threshold multiplied by 6 cents, then subtracted from $6,000).

Check out Kiplinger’s report for more information on the bonus deduction and what it means for taxpayers age 65-plus.

*Note: “Income” for the bonus deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

3. Car loan interest deduction for those over 65 in retirement

According to the National Highway Traffic Safety Administration, 89% of people 65 and older drive. What’s more, data shows that over one-quarter of new car purchases are made by this age group.

So if you’re looking to buy a vehicle, there’s a new federal tax deduction for which you may be eligible. The BBB introduced a temporary car tax break for qualifying taxpayers in 2025:

• The car loan interest deduction is worth up to $10,000 per year on qualifying vehicle loans.
• Single filers with income exceeding $100,000 (married filing joint couples with income above $200,000) will face a $200 phaseout of the deduction for every $1,000 of income above the income limit.*
• When income levels reach $150,000 for single filers ($250,000 for married filing joint couples), the car loan interest deduction is eliminated.

But while the car loan tax break might help some folks save on car buying costs, it’s important to note a couple of caveats. This federal tax break only applies to new, American-made vehicles purchased for personal use between 2025 and 2028.

For more information, check out Kiplinger’s report, New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify.

*Note: “Income” for the car loan interest deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

4. Tax credit for low-income older adults claiming the standard deduction

Like all the other tax breaks on this list, you don’t need to be working or itemize your deductions to claim the tax credit for low-income older adults. And the total tax credit amount is worth up to $7,500.

But you must meet specific eligibility requirements. For instance:

• You must be 65 years of age or older to qualify, OR
• Under 65 but retired and on permanent and total disability, AND you received taxable disability income.

Additionally, your income must meet two income limit tests to qualify for the low-income older adult tax credit.

• The first income test is based on adjusted gross income (AGI).
• Your AGI must be under $17,500 if you’re single, a surviving spouse, or head of household.
• Your AGI must be under $20,000 if you’re married and only one spouse is eligible for the credit. Otherwise, you’re subject to the $25,000 AGI limit if both spouses qualify.
• The second income test is based on your combined total nontaxable Social Security, pension, annuity, and disability income. Single filer income must be under $5,000, while married filing jointly couples must have under $7,500 (if both spouses qualify; otherwise, the limit is $5,000).

If, after all that, you’re not eligible for this retiree tax break — never fear. We have one more tax break on our list for retirees who claim the standard deduction.

*Note: Married filing separately couples who lived apart for the entire tax year may also qualify for the low-income older adult tax credit. However, these filers are subject to different income limits. The AGI limit is $12,500, and the combined total income limit is $3,750.

5. Property tax credits on your state income return (if you have one)

Did you know that nearly every state offers some type of property tax relief for retirees?

Whether it’s a homestead exemption, exclusion, property tax deferral, or freeze on your property tax bill, there may be different types of relief from property taxes for older adults in many U.S. states.

However, here are a few states that offer a credit on your state income taxes, which you must claim come tax filing time to get relief. The selections below are worth up to $1,150 or more and are available to “older adults.”

• Massachusetts offers a “senior” property tax credit of up to $2,730 per year (annually adjusted).
• Michigan adults 65 and older may qualify for up to $1,200 through the state’s homestead property tax credit, provided their property taxes exceed 3.5% of their income.
• Montana “seniors” who are 62 or older may be eligible for a credit worth up to $1,150.

Of course, eligibility rules apply, and the above list is not exhaustive. Plus, property tax breaks aren’t just for homeowners. If you’re renting in retirement, check out your state’s Department of Revenue website to see if you qualify for property tax relief on your state income return.

Read More

• Retirement Taxes: How All 50 States Tax Retirees
• Most-Overlooked Tax Breaks for Retirees and People Over 65
• How the IRS Taxes Retirement Income