9 Best Moves People Over 60 Can Make This Tax Season

Tax season can be an opportunity for those over 60 to reduce their tax burden and keep more of their hard-earned money.

Whether you're making larger contributions to your retirement plan or looking for deductions you might have missed, now is the time to optimize your return.

With the right strategies, you can take advantage of tax benefits designed specifically for older adults. Here are nine smart moves to consider when filing your taxes this year.

If you're still working and saving for retirement, catch-up contributions can help you put away more tax-advantaged money.

People over 50 can contribute an extra $1,000 to an IRA, bringing the maximum total to $8,000 in 2024. You can still make contributions for 2024 until April 15 of this year.

For 401(k) accounts, it's too late to make 2024 contributions. But you can gear up for your 2025 return by making a catch-up contribution of up to $7,500, allowing you to save up to $31,000 in total this year.

Those who are between the ages of 60 and 63 can make a bigger catch-up contribution — $11,250.

Turning 65 comes with an extra tax benefit — the IRS gives you a higher standard deduction once you reach that age. This reduces your taxable income.

According to the IRS, the higher standard deduction increases the tax break for single taxpayers by $1,950. For married taxpayers, the boost is $1,550.

If you or your spouse are still working, a spousal IRA can be a great way to save a little extra for retirement.

Even if one spouse doesn't have earned income, they can contribute to an IRA using the working spouse's earnings. This move not only helps grow your retirement savings but can also provide valuable tax deductions​.

If you're 65 or older or permanently disabled, you may qualify for the IRS credit for the elderly or disabled by filing Form 1040 or Form 1040-SR. This can reduce your tax liability.

To be eligible, your income must fall below specific thresholds — $17,500 for single filers, $20,000 for married couples where only one spouse qualifies, and $25,000 if both spouses qualify.

Additionally, your nontaxable Social Security, pensions, or disability income must remain under set limits, such as $5,000 for single filers or $7,500 for qualifying joint filers.

If you're thinking about passing wealth to heirs, making tax-free gifts now can help reduce future estate taxes.

For tax year 2024, you could give up to $18,000 per recipient without triggering gift tax reporting. This allows you to pass on assets gradually while minimizing potential estate tax liabilities later on.

Of course, 2024 is now over, so it's too late to give gifts for that tax year. But you can do so in 2025. The gift tax exclusion for this year is $19,000.

You might qualify for a tax credit if you are a low-income adult who is 65 and older.

To be eligible, you typically must have an adjusted gross income of less than $17,500 if you are a single taxpayer. The threshold is $20,000 if you are married filing jointly and one spouse qualifies, or $25,000 if both spouses qualify.

Once you reach age 70 ½, charitable giving can be a great way to lower taxable income while supporting causes you care about.

You can transfer up to $100,000 per year directly from your traditional IRA to a charity of your choosing through a qualified charitable distribution (QCD).

The amount of each QCD will be excluded from your taxable income.

The IRS offers free tax-preparation services for older adults through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.

These programs offer the services of trained professionals who can help with tax filing, ensuring you take advantage of all available deductions and credits.

The VITA program is typically for those who earn $67,000 or less, while TCE focuses on those who are 60 or older.

If you're self-employed in retirement — such as working as a consultant or developing a side hustle to earn extra money — you may be able to deduct Medicare premiums from taxable income.

This includes Part B, Part D, insurance premiums for supplemental coverage such as Medigap, and the cost of a Medicare Advantage plan. You can only do this if you are not eligible for an employer-subsidized health plan.

Tax season is a chance for older adults to make smart moves that can save them money.

Whether it's maximizing deductions, lowering taxable income, or getting free filing help, these strategies can make a significant difference to your bottom line and pave the way to a stress-free retirement.